The day I stopped by to visit Seattle’s newest biotech company, the building was chilly on one side and hot on the other. An assistant wasn’t sure at first where the light switch was in the conference room. Nobody answered right away when I called from the security phone outside.
“Hopefully the next time you come out here, we’ll figure out how the building works,” joked Les Hudson, the CEO of AVI Biopharma (NASDAQ: AVII).
AVI has reason to be a little disorganized since it just moved its headquarters from Portland, OR to Bothell, WA last month, as part of its strategy to grow into a more serious player in the field of RNA-based drugs that can treat underlying causes of disease in ways that traditional therapies can’t. The company (which is keeping some labs in Corvallis, OR) has gone through a metamorphosis this year, seeing its stock shoot up from 45 cents in the past year to $1.61 at the last close, on some progress with its first-in-class experimental treatments for Duchenne Muscular Dystrophy and Ebola and Marburg viruses. AVI, which entered the year with $11.4 million in cash in the bank, has seized on that momentum to raise another $50 million from Wall Street this year.
This is a pretty remarkable shift for a company founded in 1980, that has burned through $271 million of capital, and never in its history developed an FDA approved drug. The transition has happened under Hudson, 62, an immunologist who previously led Nabi Biopharmaceuticals, and DOV Pharmaceutical, after spending longer stretches of his career at Pharmacia and GlaxoSmithKline.
AVI moved in to space on Monte Villa Parkway in Bothell that used to be occupied by MDRNA (NASDAQ: MRNA). About 14 people at AVI had moved to the Bothell office on Sept. 17, the day I met with Hudson and AVI’s chief medical officer, Steve Shrewsbury. They have now posted 11 job openings to help boost the company’s capabilities in a number of areas, notably regulatory affairs.
Hudson was due to personally scope out a new apartment in Bellevue, a town which he says he likes because it’s close to the office and has “bright lights at night.” Hudson and Shrewsbury are still getting the lay of the land, and figuring out how to network to take advantage of all the expertise of the biotech cluster that’s nearby.
One example where location matters? The company hopes being near Seattle will help strengthen its relationship with University of Washington scientist Jeff Chamberlain, a leader in muscular dystrophy research. AVI also hopes to rely on local service providers, like Seed IP for its patent legal work, instead of looking for help from the San Francisco Bay Area, like it did when it was in Oregon. Just down the street, there are contract bioanalytical labs where the company can get important experimental work done efficiently. It’s still just getting to know who the really good local consultants are, too.
When AVI thought about making the move, it asked itself three fundamental questions. Can its employees get a good education for their kids in the area? Can the company recruit world-class people to work in the region? If they fail in this high-risk business, is it possible to get another job at a company nearby, or will we have to move again?
The Seattle area graded higher on those questions than where AVI had traditionally been located in Oregon. “We were one of two healthcare-based companies in Corvallis, and now we’re one of 200 in the Bothell area,” Hudson says.
AVI could be in a position to really recruit more world-class people to the Seattle area if it can get a good break by the end of the year. The company expects to see results soon from a clinical trial of its experimental AVI-4658 treatment for Duchenne Muscular Dystrophy, the first time it’s been formulated to circulate throughout the body. An earlier version of the drug stirred excitement in the muscular dystrophy research community because it showed the drug could cause the body to produce the dystrophin protein that patients with the disease lack. That was a small study, which only looked at injections into a small foot muscle for experimental purposes.
But even that basic finding generated a publication in The Lancet, so AVI is bound to generate more interest if it can show encouraging signs in this next important step of development.
And, of course, scientific talent in biotech not only tends to flow to exciting projects, but to companies with cash. AVI has a lot more cash than it did at the start of the year, and now it’s waiting for some positive clinical trial data.
“Hopefully we’ll be able to capture some good talent,” Shewsbury says.