The process involves synthesizing thousands of molecules in the hopes that it would make sense to study in clinical trials for a particular disease.
It was the industrial equivalent of throwing spaghetti against the wall and seeing if anything stuck.
The startup argued that the industry should use rational drug design instead. The idea was that drug development should start with understanding the structure of a molecular target that causes disease, and then design chemical compounds that can attach to that structure.
This is sometimes referred to as structure-based drug design.
Success didn’t happen overnight – far from it – but that small company turned out to be right. In fact, Vertex Pharmaceuticals
( is currently a $72 billion drug developer, one of the few to ever reach that valuation. VRTX)
Relay Therapeutics is far from that valuation milestone, but it was founded with a similar ambition.
Can Protein Motion develop better drugs?
Relay Therapeutics argues that structural design is no longer enough. Instead, drug developers need to understand how molecular targets move over time.
This is becoming increasingly important, as most molecular targets are proteins, which are very large, complex molecules that cause health and disease.
Relay calls this new approach motion-based drug design. The company starts with a precise 3D structure of a protein and then simulates how the protein moves over a few microseconds. The result is a 4D structure of a protein, where the fourth dimension is time. This is sometimes called dynamic protein structure.
Is this really necessary? Well, emerging clinical data suggests that Relay Therapeutics is on to something.
The lead drug candidate, RLY-4008, was designed to inhibit the FGFR2 protein. On the one hand, it’s a great target. It has been implicated in many different types of cancer, and only patients with liver tumors have treatment options. On the other hand, there are multiple proteins in the FGFR family. And they all look very similar.
That creates a challenge for drug developers. A chemical compound with activity against FGFR1 will increase phosphate levels in a patient’s blood, while activity against FGFR4 often causes diarrhea.
In fact, FGFR inhibitors currently or soon to be approved cause elevated phosphate levels and diarrhea in at least 90% and 24% of patients, respectively. That’s because none are selective for FGFR2 alone.
Relay Therapeutics used motion-based design to understand structural differences between FGFR1 and FGFR2. It found that a valve on FGFR1 opened more often. So it designed a chemical compound that would put itself in FGFR2’s unique pocket.
The results of the first phase 1 were impressive.
RLY-4008 caused elevated phosphate levels and diarrhea in only 14% and 10% of patients, respectively. For perspective, only side effects with a prevalence of 20% need to be listed on drug labels. If those rates of side effects persist, this could be the first FGFR inhibitor without these side effects on the label.
RLY-4008 achieved a partial response rate of 62% in subjects with FGFR2-altered liver cancer. In this context, a PR was defined as tumor shrinkage of at least 30%.
A PR rate of 62% is astonishing. Pemazyre, a FGFR inhibitor of Incyte
(, achieved a PR rate of 36% in a late-stage clinical trial. Futibatinib, a FGFR inhibitor from Taiho Oncology, achieved a PR rate of 42% in its pivotal study. INCY)
Relay Therapeutics reported that 100% of subjects given the highest dose tested achieved a partial response or better. That dose is now being investigated in a pivotal Phase 2 clinical trial.
The word “critical” means that the FDA has agreed to accept the resulting data as approval criteria, potentially negating the need for a Phase 3 trial.
Investors should not expect a 100% PR rate for a larger group of patients, but there is plenty of leeway between the asset and the closest competitor.
The company is keen to investigate RLY-4008 in multiple types of FGFR2-modified cancers, many of which have no treatment options. It will take a few years for the drug candidate to hit the market – assuming it already does – but it would represent important validation for the technology platform and movement-based drug design.
Well positioned for key high-risk events
Relay Therapeutics ended June 2022 with $838 million in cash, which is enough to fund operations through at least 2025. That significantly reduces the risk of a major short-term dilution event, allowing investors to focus on reducing risk from the pipeline.
The development of RLY-4008 will be important, but the AI drug developer also has an emerging asset portfolio focused on breast cancer.
Every protein target in the portfolio could benefit from motion-based design — and each represents a wide-open market opportunity. That includes PI3K-alpha, the most mutated protein in solid tumor cancers for which no treatment options are available.
So, sure, the recent rally in Relay Therapeutics stocks may be fading. Wider concerns about an aggressive Federal Reserve could push this biotech stock back to its all-time lows months ago.
But if investors zoom out and focus on the long term, they will likely find that it is worth paying more attention to this technology platform.