Vaxxas Entices Merck to Try Needle-Free Vaccine Technique

10/8/12Follow @xconomy

Scientists have been trying for a long time to deliver vaccines without needles. Now the Boston biotech community is importing a new take on this idea from Australia that’s also caught the eye of Merck.

Vaxxas, a company founded in Mark Kendall’s lab at the University of Queensland in Australia, said it is establishing a new headquarters in Cambridge, MA, near one of its investors, HealthCare Ventures. As part of the U.S. expansion, the company is announcing it has recruited a CEO in David Hoey, the former vice president of business development at Woburn, MA-based PathoGenetix. And Hoey, who spent the last year ramping up his work with Vaxxas as an entrepreneur in residence at HealthCare Ventures, has some good news to share on his first official day as CEO. The company has gotten a research collaboration with Merck (NYSE: MRK), one of the world’s biggest vaccine makers.

Merck has agreed to pay an upfront fee, and additional research funding to Vaxxas to test its Nanopatch technology. Financial terms aren’t being disclosed, but as part of the deal, Merck has also gotten an exclusive license to use the Vaxxas technology to help develop one undisclosed vaccine candidate in the Merck pipeline.

The concept at Vaxxas sounds straightforward. It’s attempting to make what it calls the Nanopatch, a patch that’s loaded with tens of thousands of microneedles per centimeter that can deliver tiny doses of vaccine just beneath the skin. The hope is that this patch, which a healthcare provider would slap on with a spring-loaded applicator for a couple of minutes, will stir a powerful and lasting immune response in the first-line of immune cells just under the skin. The procedure is supposed to be painless, allow manufacturers to create immune responses with one-tenth to one-hundredth of the dose that’s currently required with needles and syringes, and possibly enable vaccines that are stable enough to be shipped without refrigeration.

“This is a game changer in the vaccine space,” Hoey says. “If you look at the variety of technologies being applied in vaccines, nothing has come close to replacing needle and syringe.”

Vaxxas raised 15 million AUD (each Australian dollar is roughly the equivalent of a U.S. dollar) in a Series A venture financing for this idea in August 2011: the money came from OneVentures, Brandon Capital, the Medical Research Commercialisation Fund, and Cambridge, MA-based HealthCare Ventures. Hoey, a native of Australia, was introduced to the company by HealthCare Ventures, which invested in Woburn, MA-based PathoGenetix, where Hoey was previously the vice president of business development. Hoey became more and more interested in the Vaxxas opportunity over the past year, and he helped put together the Merck collaboration as he was winding down his involvement in PathoGenetix, he says.

Vaxxas plans to keep its 18-person R&D team in Australia, but the company’s board felt it needed to have a business operation in the U.S., Hoey says. “The science is in Australia, and the commercial opportunity is elsewhere, in North America and Europe,” he says. That means Hoey will stay in the Boston area to hunt for partners to develop and license the Nanopatch technology, and get on a plane fairly regularly to stay in touch with the R&D team.

The vaccine business typically requires huge clinical trials to satisfy health authorities that a new vaccine candidate, or mode of delivery, is safe and effective. Those trials typically cost too much and take too long for biotech startups. So Vaxxas’s business strategy depends on licensing its technology to big companies like Merck. And while the company has shown some data to support its approach in animals, it still has a long way to go before it enters an initial human clinical trial. If tests in primates go as planned, the Vaxxas technology should be able to enter human clinical trials in late 2014 or early 2015, Hoey says.

If the trials go well, Vaxxas should be in a strong position to essentially change the economics of vaccine production. Many vaccine manufacturers struggle with how much factory capacity to invest in, especially when demand for something like flu vaccine can fluctuate so wildly from season to season—or surge in a hurry in the case of a pandemic. Current manufacturing technologies tend to be slow and expensive, but Hoey says the Vaxxas patch is based on silicon wafers that use the same manufacturing infrastructure as computer microchips. If the patches can be made cheaply, and big vaccine makers can load them up with 10 times or 100 times as many doses from each batch of vaccine production, then that means companies like Merck won’t have to spend billions of dollars on new factories that would sit empty most of the year.

“We think we have a very cost-effective approach,” Hoey says. “If you can take a vaccine and enable it to produce 10 times as many doses as you could previously, that’s a distinct advantage.”

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