New biotech lands major funding - Aquinox gaining wide interest with new drugs
June 13, 2007 - A Vancouver biotechnology company that has found a way to halt abnormal blood-cell growth to combat a range of disorders from leukemia to allergic reactions has scooped up $14.5 million US in venture capital funding from local and U.S. investors.
In one of the largest early-stage financings in B.C.'s recent biotech history, Aquinox Pharmaceuticals, a spin-off from the University of B.C. and the B.C. Cancer Agency, has made a deal that will see it through to the first clinical trials of its lead drug AQX-MN100, a treatment for cancer and inflammatory disease.
The company grew out of a discovery by scientists Gerald Krystal, Raymond Andersen, Alice Mui and Christopher Ong, who found a way to activate a chemical switch that could stop abnormal blood-cell growth, a move that could inhibit the spread of many diseases.
"It's like turning on the emergency brakes on out-of-control blood cells," said David Main, chief executive officer of Aquinox. "We have developed drugs that turn on a very specific switch in the blood cells and stop them from doing their damage.
"We think it is exciting from the perspective it is a simple pharmaceutical, it can be given in a pill so it is not complicated. And it turns on one switch -- it is not present in heart tissue, brain tissue, in the GI (gastro-intestinal) tract.
"It will only affect the cells we want to target."
The switch, known as "SHIP" for SH2-containing inositol phosphatase, is only present in blood cells and it regulates the PI3 kinase (PI3K) pathway -- essential for regulating cell growth, survival and immune cell activation.
Main said drugs targeted to SHIP won't affect other tissues in the body and so side-effects will be minimized.
The findings have garnered wide interest in the pharmaceutical community, which has focused extensive efforts on the PI3K pathway in the treatment of cancer, immune disorders and metabolic diseases.
It has also won the support of major U.S. venture capitalists, attracting about half of the $14.5 million from Johnson & Johnson Development Corp. and from Baker Brothers Investments, the company that backed Langley's AnorMED, which was bought out by a U.S. pharmaceutical company for $580 million US.
While local companies have received bigger dollars in follow-up financing, Tuesday's development marks the first money over and above the $1 million that Aquinox raised in seed money last year.
"I think we have set a new precedent in terms of the size of the first round of financing, and the fact that half the money is coming from U.S. investors," said Main, a onetime QLT vice-president who was president and CEO of Inex before joining the fledgling Aquinox. "I think it speaks to a combination of things.
"Clearly what attracted me to the company is that this is very exciting science, and it is not the kind of science that is space-age complicated. Some people come up with leading edge stuff, but it is so complicated you'll never be able to commercialize it.
"This is leading edge, but it is pretty simple in its application."
Ken Galbraith, a venture partner with Vancouver's Ventures West Capital which led the Aquinox financing, and former CEO of AnorMED, said the deal reflects investors' interest in the company's "world-class" science.
"It's a space a lot of pharmaceutical companies have an interest in right now," he said. "This is a good-sized series by North American standards and it will give them enough money to put their first product into clinical trials to see how it will work with humans."
"This is a good-sized series; this is the largest Series A deal I have seen for a couple of years here in B.C."
Chris Laird, vice-president at Ventures West who joins the Aquinox board, said the deal marks a positive move for the biotech sector here since it has become particularly difficult for pre-clinical companies to get funding.
"It is hard to come by venture capital broadly today and probably even more so in biotech because the dollars are so high," he said. We're excited about the story and the quality of people involved.
"It is a positive story for a Vancouver startup."
Main said the company, which is 12 to 18 months from starting phase one trials, has two employees, he and Thomas MacRury, also from Inex plus eight people at UBC including the four founders and four people working in research. He said the financing should fund the company for about two to three years.
Source: Gillian Shaw - Vancouver Sun