Axonia Medical Raises $1 Million in Seed Financing
[Corrected 1/16/12, 1:20 p.m. See below.] When Xconomy’s biotech editor Luke Timmerman first wrote about Axonia Medical in January 2011, he wondered if the Kalamazoo, MI-based startup would be able to raise the investment funds it needs, given the cautious venture-capital climate and the unprecedented nature of Axonia’s nerve-regeneration technology. The startup produces living, functional tissue-engineered nerve grafts in the lab that can replace and repair damaged parts of the nervous system.
Harry Ledebur, Axonia’s president and CEO, recently contacted Xconomy to let us know that the company has just raised its first million in seed financing from the Southwest Michigan First Life Science Venture Fund and expects to close on another $500,000 to $1 million in the next six months, bringing Axonia within reach of its goal of $3 million.
“I took quite a few meetings,” Ledebur said, describing what the past year has been like for the company. “I got a lot of valuable feedback, which I used to structure our strategic plan.”
The initial investment allows Axonia to formally kick off operations, with Accelerator‘s president and Chief Business Officer Dave Schubert serving as chairman of the board. The company also was invited to join the Rutgers-Cleveland Clinic Consortium of the Armed Forces Institute of Regenerative Medicine (AFIRM), which may offer Axonia a small grant in the future to support support preclinical studies for peripheral nerve injury using its tissue-engineered nerve grafts. [An earlier version of this paragraph listed the wrong title for Dave Schubert. We regret the error.]
“It’s a validation of our approach,” Ledebur says of the opportunity of join AFIRM. “Our technology fits with the current medical needs of the Department of Defense’s Wounded Warriors program.”
The concept of Axonia’s technology, which is spun out of the University of Pennsylvania, hinges on the production of axons, the long thin parts of nerve cells that carry signals to distant target cells. Unlike other regenerative treatments in development, Axonia’s method doesn’t involve stem cells. Rather, Axonia uses neurons from patients or cadavers to grow long, integrated tracks of axons in the lab and then implants this tissue into the body, which then enables or accelerates the body’s natural repair system.
“Axons seem to be the key catalyst in the repair process,” Ledebur explains. “We’re the only company, to my knowledge, that knows how to grow fully differentiated nervous tissue.”
The results so far in rodent models are promising with patients who have peripheral nerve damage, spinal cord injuries, and brain injuries—injuries that the body has a very difficult time repairing on its own. He estimates that millions of U.S. patients per year with nervous system injuries could utilize Axonia’s proprietary process, which the company says represents a $1.2 billion market.
Axonia has already acheived its proof of concept in a rat model of spinal cord injury. The next step, Ledebur says, is to test it in pigs. If all goes according to plan, Axonia will begin clinical trials in roughly three years.
“We’re focusing our money now on proving the superiority of our standard of care,” Ledebur adds. “We want to repair what’s currently unrepairable.”