Date: Jun 07, 2013 Author: Ben Fidler Source: xConomy (
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Avaxia Biologics's big plan has been to create a line of drugs that go after the same protein, tumor necrosis factor, that AbbVie's adalimumab (Humira) does—just in a different, more localized way. Clearly, its approach has gotten AbbVie's (NYSE: ABBV) attention.
Lexington, MA-based Avaxia announced today that it has closed an $11.4 million Series B round. While the round was led by existing investors Cherrystone Angels, Golden Seeds, and several other angels, the headliner is that AbbVie Biotech Ventures—the VC arm of the multi-billion dollar pharmaceutical business spun out by Abbott Laboratories in January—has become Avaxia's first institutional investor and joined the group. AbbVie Biotech Ventures managing partner David Donabedian has gotten a seat on Avaxia's board of directors as part of the deal, according to Avaxia CEO Barbara Fox.
Avaxia has now raised $15.5 million in equity and about $6 million in non-dilutive grants and contracts since its inception, Fox says.
Avaxia is using most of the cash to wind up an early-stage trial for its lead drug candidate, AVX-470, an antibody the company hopes to use to treat patients with ulcerative colitis. It will also help Avaxia manufacture enough drugs to use in its mid-stage clinical trial, while leaving the company with some breathing room to plan that study after it finishes the one currently underway.
Fox was clear to say that AbbVie is making an investment only: it has no rights to the drug itself, meaning Avaxia is free to find a partner to help develop it. AbbVie isn't getting an inside track towards a potential acquisition of the company as part of the deal.
"Their investment gives them a close relationship with us, it allows us to draw on their expertise with gastroenterology which we are delighted with," Fox says. "It really gives them kind of a seat at the table, but does not give them any product rights."
Avaxia's early-stage study, which is enrolling somewhere between 24 and 30 patients, is expected to produce top-line clinical data by the end of the year, she says.
Fox adds that Avaxia is "actively" looking for a partner to either co-develop AVX-470 with or license the drug to altogether.
"Our preference would be to find a partner early on who can help us to design the best Phase 2 clinical trial, and who can help us make sure the drug supply manufacturing is going along consistent with what they would like to see," she says. "And we would like to both get some early money back to our investors, primarily our angel investors who have been patient—we would like to reward their patience."
Avaxia's drug works by targeting tumor necrosis factor, a protein implicated in a number of inflammatory diseases. Drugs hitting that target have brought in billions for the pharmaceutical industry, as AbbVie knows better than anyone else: it has turned adalimumab into the biggest selling drug in the world, using it to treat a host of disease types such as rheumatoid arthritis.
Typically, however, anti-tumor necrosis factor drugs, are injected or infused into the body. Avaxia, using an antibody produced in cow's milk, has created a pill. Though others have tried to create an oral anti-TNF drug in the past, Fox says Avaxia's approach is different in that its drugs aren't targeting inflammatory diseases affecting the whole system. While others made oral anti-TNF pills that were broadly absorbed and circulated through the bloodstream, Avaxia's drug is designed to work in the gut and nowhere else.
"We're just looking for local activity," she says.
Indeed, Avaxia calls its drugs "gut-targeted therapeutics," in that they are designed specifically to go directly to the gut and use their TNF-fighting punch right at the site of inflammation, which should have little affect on the rest of the system, and thus, fewer side effects. To create those drugs, Avaxia taps into cow's milk. Pregnant cows are immunized with an engineered form of human TNF; Avaxia isolates the antibody from the milk produced by the cows just before they give birth.
"These antibodies are not only safe for oral administration, but they're also designed by nature to work within the gut, and they are inherently stable to intestinal digestion," Fox says.
Three types of drugs are currently used to treat inflammatory bowel disease: corticosteroids, which Fox says can be useful to treat a flare-up, but can't be used for very long; a class of drugs known as 5-aminosalicyclic acids, oral antinflammatory drugs that "for most people are not strong enough," according to Fox; and injectable anti-TNF's such as adalimumab and Johnson & Johnson's infliximab (Remicade).
"We are orally dosed, and we believe that the local activity of the antibody is beneficial for some patients," she says. "There are advantages to targeting the activity of a drug locally. You minimize the effects outside of a disease space's organ of interest, and you potentially increase efficacy."
Avaxia has no problem licensing out AVX-470 to help validate its drug development concept. Should it be able to do so, the rest of its preclinical drugs take on a different light.
"If we can show that this first one works, then it really proves out the entire platform and that allows us to generate hopefully the research collaborations, the partnerships we need, and the financing we need to develop out the whole platform," Fox says.
