Avaxia Pulls in $2M from Angels to Fund Development of Cow-Derived Drug
The phrase “pharmaceutical manufacturing” doesn’t generally evoke visions of dairy farms. But it does for Barbara Fox, co-founder and CEO of Lexington, MA-based Avaxia Biologics, which is developing a drug derived from cow’s milk. And she’s succeeding in getting investors to share her vision: On November 10, Avaxia announced that it had closed $2.2 million in Series A funding, led by Cherrystone Angels in Providence, RI, with participation from Boston Harbor Angels and undisclosed individual investors. Fox is confident she’ll find an additional $1.5 million by the end of the year.
Avaxia is developing an antibody-based drug called AVX-470, which combats tumor necrosis factor (TNF), a protein that has been implicated in several inflammatory diseases. Unlike other anti-TNF drugs, such as Johnson & Johnson’s infliximab (Remicade), AVX-470 is designed to be taken orally, rather than injected or infused. Avaxia is developing the drug in two diseases for which there are few effective treatments: inflammatory bowel disease (IBD) and GI acute radiation syndrome, a common complication suffered by cancer patients.
Fox, an immunologist by training, came up with the idea for the drug a few years ago, when she was consulting for a company that was developing bovine antibodies. She realized that cows might offer an ideal way to deliver antibody therapies in an easy-to-take pill—an oral formulation that can survive the trip through the GI tract. “The trick is to find antibodies that are not chewed up when they go through the stomach,” she says. “Antibodies from cow’s milk are inherently stable. They’re designed that way by nature.”
Avaxia produces AVX-470 by immunizing pregnant cows with a bioengineered form of human TNF. Then the antibody made by the cows’ immune systems is isolated from their “colostrum”—the milk they make just before giving birth (which is also called “first milk”). “It’s a very rich source of antibodies,” Fox says. “You can get about a kilo of our antibody from a cow in the first four days after calving.”
As unconventional as this manufacturing method may seem, Fox says, the FDA is fully on board with the idea. There are already about 15 approved animal-derived drugs on the market, including one made by Avaxia’s famous neighbor, biotech giant Genzyme (now owned by Sanofi). The drug, called antithymocyte globulin rabbit (Thymoglobulin),prevents organ rejection in kidney transplant patients and is made by injecting rabbits with human white blood cells. Avaxia’s drug, however, would be the first antibody derived from cows.
Avaxia met with the FDA in May and is on track to start human trials in IBD next summer. The company is using a contract manufacturing facility in upstate New York to produce the drug for the trial.
If AVX-470 is approved, Avaxia will establish manufacturing facilities near large dairy farms, Fox says. “We anticipate becoming part of the normal herd-management process. As the cows come out of milk production, they’ll come to us for one last stop,” she says. Processes will likely be put in place to ensure the drug-producing cows don’t come in contact with healthy people. After the cows are immunized and the antibody is harvested, she says, “I think they will probably leave the human food chain.”
In addition to the recent angel round, Avaxia has raised $4.3 million in non-venture financing, including a $2.9 million, two-year contract with the Biomedical Advanced Research and Development Authority (BARDA). The BARDA funding will be used to develop AVX-470 to treat radiation syndrome.
BARDA’s ultimate goal would be to purchase AVX-470 for the national stockpile of drugs that would be used in the event of an attack with a radiological weapon, Fox says. BARDA’s development process is unconventional: It only requires that such drugs be tested in animals before they’re stockpiled for human use in an emergency. “We anticipate that if the [animal] data continues to look good, they’ll support the development of the product all the way through to market,” Fox says. She estimates BARDA could spend as much as $100 million annually to stockpile the drug.
Avaxia is also examining AVX-470′s potential in oncology, as a supportive drug for patients who suffer abdominal distress following radiation-based cancer treatments. The idea, says Fox, came from one of Avaxia’s scientific advisors, Stephen Sonis, a Harvard professor who is chief of the division of oral medicine at the Dana-Farber Cancer Institute and a physician at Brigham and Women’s Hospital. “He pioneered the idea that TNF and inflammation are important drivers in radiation damage,” Fox says.
Fox anticipates the company will need to raise more money next year, though she’s confident she can continue to fund the company without having to go to VCs. She points to the example of another Boston-area company, SmartCells, which raised $9.8 million in angel funding and then was bought by Merck (NYSE: MRK) in late 2010 for $500 million. “There were a lot of angels in the New England community who invested in that deal and recognized there is actually a path forward, if you can be smart about how you’re spending your money,” she says.
In August, Avaxia transitioned from being a virtual company to having a physical home—a Lexington facility with 8,000 square feet of lab space. The company’s early-stage pipeline includes molecules for oral mucositis, celiac disease, diabetes, and obesity, Fox says.
Should the company’s lead programs succeed, Avaxia will have to scale up its cow-based manufacturing system quickly. But Fox isn’t concerned. “There are 9.5 million dairy cows in this country and every one of them calves every year,” she says. “That’s an enormous number of cows to draw from. It’s pretty straightforward.”