Full article reprinted from Start-Up June 23, 2009
In the May 2009 edition of Start-Up, we ran a story titled "Will Private Vaccine Companies Follow VaxInnate's Lead" in which we mistakenly grouped BioCryst Pharmaceuticals Inc. with other companies developing vaccines to address the recent swine-flu occurrence. BioCryst is not a vaccine maker, but is developing a novel antiviral, Peramivir, that could have utility in preventing the spread of flu virus in a host. We apologize for the error.
-Joseph Haas
Full article reprinted from Start-Up June 23, 2009
It may be true that nothing succeeds like success, but it seems just as true that nothing sells as well as fear. In the case of the recent swine-flu scare, the most immediate valuation impact was felt by a number of publicly held biotechs focused on the flu vaccine space. Companies like Novavax Inc., BioCryst Pharmaceuticals Inc. and Vical Inc. all enjoyed rising fortunes during the brief "aporkalypse." Private companies too have seemingly taken advantage of the heightened awareness of seasonal flu dangers. VaxInnate Inc. raised $30 million in a Series D round in early May for various ongoing projects, including the start of preclinical study of a swine flu vaccine.
It may be true that nothing succeeds like success, but it seems just as true that nothing sells as well as fear.
In the case of the recent swine-flu scare, the most immediate valuation impact was felt by a number of publicly held biotechs focused on the flu vaccine space. Companies like Novavax Inc., BioCryst Pharmaceuticals Inc. and Vical Inc. all enjoyed rising fortunes during the brief "aporkalypse," with Rockville, Md.-based Novavax seeing its market cap rise 103% to $126 million, while Birmingham, Ala.-based BioCryst tallied an 83% increase to $144 million, for example, as fears arose that the H1N1 outbreak might reach pandemic levels. As START-UP went to press, Vical announced it was raising $15.4 million in a private placement, selling stock/warrant units at $2.31 apiece.
Novavax, which had raised about $18.5 million in a pair of private placement deals in just weeks before the swine flu eruption, used the increase in its stock valuation to help retire $17 million of $22 million in convertible debt it must pay off by mid-July. On May 15, the firm announced that enrollment was complete in Phase IIa trial of its trivalent virus-like particle seasonal flu vaccine that would evaluate the candidate against strains that circulated during the current flu season, including H1N1. Last December, the vaccine completed a prior Phase II trial in strains that circulated during the 2005-2006 season.
BioCryst has advanced peramivir, a novel antiviral which inhibits neuraminidase, an enzyme that facilitates the spread of flu within the host, to Phase II in seasonal and acute flu. Commercialization partner Shionogi & Co. Ltd., meanwhile, previously launched a Phase III trial in seasonal flu. Vical uses its proprietary RapidResponse gene-based vaccine process to potentially speed up and enhance vaccine production.
Private companies too have seemingly taken advantage of the heightened awareness of seasonal flu dangers. Cranbury, N.J.-based VaxInnate Inc. raised $30 million in a Series D round in early May for various ongoing projects, including the start of preclinical study of a swine flu vaccine. VaxInnate, which has raised roughly $95 million total in four funding rounds to date, added Wellcome Trust to previous investors CHL Medical Partners, Canaan Partners, Healthcare Ventures, MedImmune Ventures, New Leaf Venture Partners and Oxford Bioscience Partners in the Series D.
Pulmatrix Inc. believes its PUR003, an aerosol inhalation drug, will offer anti-infective protection against varying influenza strains. Previously seeded with $18 million from venture capital firms Polaris Venture Partners and 5AM Ventures, Pulmatrix hopes the recent flu news will enable it to conduct another round of funding.
"We want to do a funding round now that will allow us to advance in several different indications and then – beyond our two initial investors, which are both reinvesting and very passionate about the company – use a series of partnering activities and probably some government support and go from there," says Pulmatrix CEO Robert Connelly.
Several other private vaccine companies could be poised to join VaxInnate and, like Pulmatrix, seek to take advantage of what might be a promising fundraising environment for potentially novel flu therapies. These include Birmingham, Ala.-based Vaxin Inc., San Francisco's Vaxart Inc. and New York's Vivaldi Biosciences Inc.
Vivaldi, focused on developing live attenuated vaccines for seasonal and pandemic flu, already has been busy on the financial front this year, raising nearly $19 million in a Series A in January under a deal that could bring it an additional $4 million-plus in milestones. Financed with convertible preferred shares, the round was led by Bay City Capital and NGN Capital, each of which got to place a member on Vivaldi's board. Joining in the funding round were New York City Investment Fund and Alexandria Real Estate Equities.
Vivaldi will use the cash to further its cell-based manufacturing efforts and to file an IND for its lead vaccine candidate. The company is developing live attenuated vaccines for seasonal and pandemic influenza based on research performed at Mount Sinai Medical Center (NY)'s Mount Sinai School of Medicine.
Vaxin is slightly further along. The company announced in late February that it had completed dosing of subjects in a Phase I trial of its intranasal, cell-based vaccine for H5N1 pandemic flu virus. Co-sponsored by its Korean commercialization partner Kolmar Korea, the trial of 48 healthy volunteers will be evaluated for primary endpoints of safety and immunogenicity. In preclinical work, a single dose of Vaxin's nasal spray candidate provided 100% protection against multiple subtypes of flu, according to the company, which hopes its product will prove effective against life-threatening strains of avian and human influenza. Developed through cell cultures rather than with chicken eggs, the Vaxin candidate also may offer cheaper, faster production, with lower risk of allergic reactions or contamination than occur with currently marketed vaccines, the firm adds.
Another potential player in the space is Vaxart, which raised $2.7 million in a Series A in the fall of 2007. In a Q&A document about the H1N1 outbreak posted on its Web site, the company says its production model could produce a vaccine two months quicker than any other production method dependent on growing the flu virus. Vaxart uses a small, inactive piece of pandemic virus to produce its product, which would be provided as an oral capsule rather than an injection. Among the advantages to an oral therapy, Vaxart says, is potentially "helping avoid crowds that could further spread disease (social distancing). In an emergency, the vaccine could be delivered by mail carriers, for example."
While Vaxart's candidate has not been tested in humans yet, the firm notes that in animal testing its vaccine demonstrated strong immune responses against a virus that had drifted from the strain initially used in making the vaccine. "If this holds true with H1N1 flu as well, a Vaxart vaccine could help protect against successive waves of pandemic caused by variants of H1N1 flu," the company says.
Vaxart adds that it has obtained the gene-sequencing code for the current H1N1 strain and hopes to product a candidate for animal testing by late May or early June. Noting that FDA has established as system for accelerated development, approval and acquisition of therapies for pandemic illnesses not adequately covered by available medications, Vaxart says it "will work closely with FDA and HHS to determine whether accelerated development and supply of an H1N1 vaccine based on Vaxart technology could play a role" in addressing the recent outbreak.
Among publicly traded biotechs, Dynavax Technologies Corp. also picked up a small bounce from the flu news, and the increase in its market to cap to nearly $44 million looked to have stabilized at mid-month. The biotech had some timely news to share when it released promising preclinical data on its universal flu vaccine April 30. Dynavax hopes to move its candidate—composed of two conserved antigens (nucleoprotein and matrix 2 protein's extracellular domain, aka M2e) found in all influenza strains, plus a proprietary toll-like receptor 9 agonist as an adjuvant—into Phase I testing during the first half of next year.
—Joseph Haas
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