Seattle-based Allozyne wasn’t able to go public this year, so it has fallen back on Plan B, tapping its existing venture capital backers one more time in a bid to create more value around its lead multiple sclerosis drug candidate.
Allozyne, which has spent about $50 million since its founding in 2005 and was down to its last $1.3 million in cash at the end of June, has raised an undisclosed amount of new venture capital from its existing investors, according to CEO Meenu Chhabra. The money from Arch Venture Partners, MPM Capital, and OVP Venture Partners will be used to help the company push ahead with a plan for 2012 to move its lead multiple sclerosis drug into the third and final phase of clinical trials normally required for FDA approval, Chhabra says.
“The syndicate is extremely excited that we are on a Phase III trajectory in 2012,” Chhabra says.
Allozyne remains a private, independent company after it pulled the plug on a six-month effort to merge with San Francisco-based Poniard Pharmaceuticals (NASDAQ: [[ticker:PARD]]), which was supposed to turn Allozyne into a public company. Selling the proposal to shareholders took longer than expected, and the deal ultimately fizzled because Poniard had fallen out of compliance with NASDAQ listing requirements that say a company must have a minimum market capitalization of $15 million. That was the whole point of the transaction—getting a NASDAQ listing in order to tap large funds that invest in public companies—so it no longer made sense to go through with the deal, Chhabra says.
Moving on, Allozyne turned to additional private financing, and continues to talk with partners and mull other options, like another reverse merger or a conventional initial public offering of shares, Chhabra says. The company has about 20 employees, and hasn’t made any staff cutbacks, she says.
Allozyne’s next strategic move depends heavily on an aggressive clinical development plan for its lead asset, AZ01. Allozyne is looking to leapfrog from Phase I trials all the way to Phase III—skipping the usual intermediate step, Chhabra says. The company believes that is possible because it isn’t blazing a completely new trail with a new molecular entity, but rather is taking an existing drug the FDA knows well—interferon-beta—and packaging it in a new way so it can be injected less frequently than the existing products on the market. Weston, MA-based Biogen Idec (NASDAQ: [[ticker:BIIB]]) has established this quicker-than-usual regulatory pathway with its own version of a long-lasting version of interferon-beta.
The Allozyne proposal, which it plans to make to the FDA at a meeting in early 2012, will be to enroll 700 patients who will be
