Seattle’s Theraclone Strikes $18M Deal to Make Flu-Fighting Antibodies with Japanese Company

10/5/09Follow @xconomy

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capabilities against a couple of well-known protein markers on flu virus—called M2E and hemagglutinin (HA), Fanning says. If done right, these antibodies will bind with a “conserved” region on the virus that’s found on almost all of the present, and hopefully, future mutated strains of flu, Fanning says.

Since genetically engineered antibodies are expensive to manufacture, and a cheaper oral pill from Roche called oseltamivir (Tamiflu) is already available against most kinds of flu, I wondered why anybody would want an antibody alternative. It’s not practical to give tens or hundreds of millions of people an antibody drug that’s likely to cost thousands of dollars per person.

For starters, Tamiflu doesn’t appear to work against all strains, and the government has an interest in stockpiling a bigger gun just in case it’s needed, Fanning says. In the case of a flu pandemic, the antibody could be given to about 6 million first-line responders—doctors, nurses, paramedics, police—to keep them from contracting the virus and spreading it more widely, Fanning says.

Unlike a vaccine, which typically takes two weeks to build up protective immunity, an antibody treatment would be useful in a pandemic because it can start kicking in immediately, and could be given to first responders right before an expected exposure, or right after, Fanning says. It might also be used for elderly people with weak immune systems who don’t respond well to vaccines, or immune-compromised patients, like those who have undergone organ transplants, Fanning says. An antibody treatment typically has a shelf life of a year or two, he says.

Whether those markets materialize for Theraclone or not, the Japanese deal is important to the present because it provides immediate cash to support the company’s antibody discovery group, which makes up 18 of its 21 employees. That group is also supported by the International AIDS Vaccine Initiative, and was built largely with a $29 million venture investment in March 2007 from Arch Venture Partners, Canaan Partners, Healthcare Ventures, Amgen Ventures, MPM Capital, and Alexandria Real Estate Equities.

Fanning didn’t say how much cash Theraclone has left in the bank, but like a lot of biotech startup CEOs, he needs to find cash from sources other than the VCs. That’s why this deal is important.

“It’s a great relief for us in this environment and helps us to conserve cash,” Fanning says.

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