Rebooted Texas Cancer Agency Funds Biotech Firms

2/28/14Follow @angelashah

Jon Northrup will move his life sciences firm Beta Cat Pharmaceuticals to Texas after all.

A year ago, Northup was caught in limbo and unsure how he should proceed in getting funding for his company, which is developing a drug that targets cancer stem cells. Beta Cat had applied for a $15 million grant from the Cancer Prevention and Research Institute of Texas to help it fund clinical trials, but right before a decision was due, the agency was put on hold after state leaders found that CPRIT had improperly awarded three grants.

But last week, Beta Cat, along with five other biotech companies, got word that their proposals were funded in the agency’s first round of product development grants since it resumed operations last fall. “All’s well that ends well,” he says. “I can say that it is an arduous process and a deep one.”

Northrup says the company is now working on closing on the required matching funds, as well as planning its move to Texas. Beta Cat will likely relocate to Dallas where it has an existing relationship with researchers at the University of Texas Southwestern Medical Center.

The cancer agency said it would be awarding a total of $102.8 million in grants, including prevention awards to Rice University and the University of Texas MD Anderson Cancer Center. Nearly $64 million of that total is going toward biotech companies through product development grants.

Other companies that received awards included: CerRX in Lubbock, TX; Essa Pharma in Vancouver; Plymouth, MI-based ProNAi Therapeutics, which last month secured a Series C round of financing; DNAtrix in Houston; and Austin, TX-based, ProPrep Surgical.

Wayne Roberts, CPRIT’s executive director, said last week that the agency had moved on from the controversy. “CPRIT never went away; the work here never stopped,” he said during remarks at BioHouston’s Life Science Forum at Rice University’s BioResearch Collaborative. “The problems were with three out of 498 grants. The problems were exaggerated and overblown, though there were problems.”

DNAtrix, a Houston-based biotech company that aims to use viruses to target and destroy cancer cells, received $10.8 million in funding to further development of its drug to treat an aggressive form of brain cancer.

The company will use the grant to fund Phase II clinical trials for DNX-2401, a genetically modified adenovirus that attacks brain tumors. The drug is being developed for the treatment of several cancers, including recurrent glioblastoma.

“We think it will show our product is much more efficacious than existing drugs,” says Frank Tufaro, DNAtrix’s CEO. He expects the trial to consist of just fewer than 100 patients.

In the phase I study, DNAtrix says, the therapy was able to prolong life by a year in seven patients. The company also had one patient who has survived for more than three years. Tufaro says that the median survival from diagnosis for patients with glioblastoma is just 15 months.

The firm, which was founded in 2005, has 12 employees and expects to close on a Series B round of as much as $10 million in April, Tufaro says. DNAtrix has also received a $500,000 grant from the Texas Emerging Technology Fund.

Angela Shah is the editor of Xconomy Texas. She can be reached at ashah@xconomy.com or (214) 793-5763. Follow @angelashah

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