Date: Jun 30, 2014 Author: Ron Leuty Source: bizjournals (
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Gene therapy developer Avalanche Biotechnologies Inc. wants $86.25 million from investors in an initial public offering to pay for the final clinical trial of an experimental treatment for a blinding eye disease.
The Menlo Park drug developer's filing Monday is the fifth over the past 10 days by Bay Area life sciences companies. It also comes after Avalanche raised $55 million Series B round of funding in April and closed a potential $640 million deal last month with Regeneron Pharmaceuticals Inc.
Avalanche, led by CEO and former Genentech Inc. scientist Tom Chalberg, would trade on the NASDAQ exchange as "AAVL."
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Avalanche's backers include Regeneron, which owns 9.1 percent, Zygtech LLC and Avalanche founder Mitchell Finer, who also is chief scientific officer at Cambridge, Mass.-based gene therapy developer Bluebird Bio (NASDAQ: BLUE), the company said in its IPO filing with the Securities and Exchange Commission.
Chalberg owns 21 percent of the company.
Avalanche's venture backers have included Venrock Partners, Deerfield Management, Adage Capital Partners and affiliates of Cowen & Co.
Gene therapies fell out of a favor a decade or so ago but have seen a renaissance as companies have fine-tuned technology that could lead to single-shot cures for diseases like HIV, hemophilia and rare conditions caused by a single gene mutation.
There are no approved gene therapies in the United States.
Gene therapies typically use a virus that is stripped of viral genes and replaced with genes that correct a specific condition. The virus — in Avalanche's case, adeno-associated virus — essentially is used as a capsule to carry the correct gene or the correct set of DNA instructions to the right landing spot in the body.
Avalanche's lead drug, AVA-101, transports a gene that sets off the secretion of a protein. That protein blocks the signal of another protein, VEGF, that is key to the growth of new blood vessels that block the vision of patients with wet age-related macular degeneration.
The blinding eye disease today is treated mainly with five to seven injections a year of Genentech's Lucentis or Avastin. But, like other gene therapies, AVA-101 could fix the condition with a single shot that goes as deeply into the retina as Lucentis, Avastin or Regeneron's Eylea.
Avalanche expects initial data from a Phase IIa study of the drug in mid-2015 — the middle part of the typical three-stage FDA trial process — and hopes to make an investigational new drug filing with the Food and Drug Administration in the second half of next year.
Avalanche, which has 18 full-time employees, also is researching another drug, called AVA-201, that it hopes will prevent wet AMD. That drug, however, won't enter preclinical studies until later this year, the company said in its SEC filing.
Avalanche also is working preclinically on AVA-101 in diabetic macular edema and retinal vein occlusion, two other blinding eye diseases.
Under its deal with Tarrytown, N.Y.-based Regeneration (NASDAQ: REGN), Avalanche is working on AVA-311, a preclinical drug aimed at X-linked juvenile retinoschisis, or XLRS. The disease leads to splitting of the retina's neurosensory layers and loss of vision.
Avalanche received $8 million upfront from Regeneron. It could receive up to $640 million in development and regulatory milestone payments as well as royalties based on net sales of products developed out of the collaboration.
Altogether, the company said in the SEC filing, the Regeneron payment, $53 million netted from the Series B funding and Avalanche's $169,000 cash as of March 31 is enough to fund Avalanche operations through at least the end of 2015.
Eight-year-old Avalanche, which until December was based in San Francisco's South of Market neighborhood, had an accumulated deficit of $10.5 million at the end of March.
Ron Leuty covers biotech, higher education and China for the San Francisco Business Times.
