Pacific surf crashes and mist clings to the tops of old-growth spruce and cedar at the mouth of Kapoose Creek. Here on the wild west coast of Vancouver Island, a startup is hoping to tap the frontier of fungi for new drugs. Kapoose Creek Bio operates a remote high-tech research facility overlooking the ocean and rainforest. From this base, staff collect fungi samples year-round, working closely with CEO Eric Brown, a Harvard-educated McMaster University biochemist. Brown’s lab has developed a proprietary AI-driven platform dubbed unEarth RX that’s enabling researchers to plumb the complexity of fungal biochemistry much faster than conventional approaches to laboratory drug discovery allow.

According to Brown, 30 percent of the 5,000 fungi samples in Kapoose Creek’s ever-growing collection have no known match in the public domain. “They’re mysterious,” he says. “Fungi are propelled by millions of years of interspecies evolution to create certain chemicals. We don’t know what they’ll be useful for. We just know they’re not created by accident. Nature doesn’t make mistakes.”

Kapoose Creek is focused on three broad areas of medical treatment: infectious disease, cancer and neurological disorders such as Parkinson’s and Alzheimer’s.

Brown and his team conduct two tests on biochemical compounds, known as metabolites, derived from the fungal samples. The first examines how these metabolites interact with human cells in culture. The second looks at how, or if, they influence animal behaviour. For test subjects, Brown uses the roundworm. Just a millimetre in length, this organism has a nervous system remarkably similar to that of humans. By recording the shape and movements of these worms, researchers can identify neurochemical effects. The AI platform uses machine learning to rapidly compare the results of these tests with thousands of known chemical compounds, from caffeine to acetaminophen.

This produces what Brown calls “activity maps” that allow researchers “to size up the therapeutic potential of these metabolites.”

Scientists believe that Kingdom fungi contains between 2 and 5 million species, yet roughly only 150,000 species have so far been formally discovered and described.

No stone is being left unturned, and Kapoose Creek has history to inspire its efforts. In 1928, Dr. Alexander Fleming famously discovered penicillin—one of the most widely recognized and prescribed medicines in the world—almost by accident. After returning from a holiday to his lab at London’s St Mary’s Hospital, he noticed mould growing on a petri dish of Staphylococcus bacteria. The mould appeared to be preventing the bacteria from growing around it. This simple but keen observation led to the discovery of an antibiotic derived from the fungus, Penicillium notatum, that would go on to prevent the spread of deadly bacteria and save millions of lives.

Cholesterol-fighting statins, the antibiotic cephalosporin, the migraine medication ergotamine and the immunosuppressive drug cyclosporine are all derived from the fungi.

The stakes are huge. The sale of statins, first commercialized by Merck Corporation in 1987 after decades of research, now generates more than US$19 billion in revenue annually. But finding the next blockbuster drug could be like searching for a needle in a haystack.

Brown would not share specifics about any promising strikes but says he’s excited “about the performance of the platform in getting us bonafide hit compounds quickly.”

The company was founded by Sam Feldman, a well-known Vancouver entertainment mogul who founded the Feldman Agency and represented international artists such as Norah Jones and John Fogerty, as well as Canadian musical icons Diana Krall and Sarah McLachlan. (In 2019, the music biz entrepreneur sold his stake in the talent agency to two of the company’s senior executives but continues to stay active in the industry.)

Feldman’s mushroom venture launched first as Kapoose Creek Wellness with the aim of pursuing the market in hallucinogenic, or magic mushrooms. In recent years there’s been a surge of interest among health-care professionals in psilocybin, a psychoactive chemical compound contained in more than 200 species of magic mushrooms, for treating depression, anxiety and other mental health disorders. The production, sale and possession of magic mushrooms has been prohibited in Canada since 1974 when it was declared a controlled substance under the Food and Drugs Act. Though government now makes exceptions for clinical trials and special treatment, magic mushrooms remain tightly regulated.

According to Kapoose Creek board member Norma Biln, the business case for magic mushrooms wasn’t there. Market uncertainty and regulatory hurdles prompted a rebrand to Kapoose Creek Bio and a pivot to drug discovery. The company is now trying hard to distance itself from hallucinogens.

Biln is a biotech pioneer and founder of Augurex Life Sciences, a privately held company focused on identifying biomarkers associated with rheumatoid arthritis. She joined the Kapoose Creek board in April and likens the search for the next blockbuster drug to a horse race.

“Where are you going to get the best hits first?” she says.

It typically takes 10 years to bring a drug from discovery through testing, clinical trials, Health Canada approval and finally to market-ready commercialization. According to Biln, AI and machine learning could slash this time by up to two-thirds.

“It’s faster and cheaper than conventional drug discovery,” Biln says.

Unlocking the therapeutic secrets of fungal biochemistry faster than anyone else is the game-changing proposition that Biln and her fellow board members hope will make Kapoose Creek a winner.