With claims of potential Alzheimer’s edge, Vaxxinity squeaks out $78M IPO
The idea of turning the body’s cells into tiny factories churning out therapeutic proteins seemed like a long shot a short time ago, but messenger RNA vaccines for Covid-19 validated that approach. Alzheimer’s disease is Vaxxinity’s lead disease target, and the company claims that its approach of getting the body to produce therapeutic antibodies could have advantages over a Biogen drug approved earlier this year for the disorder. Investors, however, took a cooler view of the company’s IPO, and though Vaxxinity was able to raise $78 million from the stock offering, the biotech had to shrink the deal size to pull it off.
Vaxxinity priced its offering of 6 million shares at $13 apiece. The Dallas-based company had planned to offer 6.7 million shares in the range of $14 to $16 each. After beginning trading on the Nasdaq Thursday under the stock symbol “VAXX,” the stock price saw some pop reaching as high as $21.31 per share before settling down at $16.55 at market close, 27% higher than the lowered IPO price.
Vaxxinity aims to go beyond the class of therapies called monoclonal antibodies. These therapies, made by engineering proteins to produce a targeted treatment, have reached the market for a range of chronic diseases. But these drugs must be given as frequent injections or infusions, which many patients find either undesirable or just inconvenient. Vaxxinity aims to overcome those challenges by getting a patient’s body to produce the therapeutic antibodies. In its IPO filing, Vaxxinity said its technology employs synthetic peptides to selectively activate the immune system to make antibodies against a specific target. Those targets can include self-antigens to which the body is already tolerant.
The Vaxxinity technology is intended to bring several advantages compared to monoclonal antibody therapies. Much of the expense of a monoclonal antibody therapy comes from manufacturing it. Because the patient’s immune system becomes the manufacturing plant for a Vaxxinity therapy, the company’s approach avoids much of the costs associated with the materials and the process of antibody drug production. The company also claims a dosing advantage. Whereas antibody therapies may require bi-weekly or monthly injections or infusions, Vaxxinity said its drugs will require three priming doses followed by a booster two to four times per year.
Vaxxinity’s therapies might also offer safety advantages. Because a Vaxxinity therapy is designed to be specific to a particular antigen, it should avoid off-target effects. As for efficacy, the company said that by eliciting the body to product antibodies, this approach could avoid the production of anti-drug antibodies that limit the efficacy of monoclonal antibody therapies over time.
Lead Vaxxinity program UB-311 has reached mid-stage clinical development in Alzheimer’s disease. The peptide drug is designed to get the body to produce antibodies against amyloid beta, a protein that forms plaques in the brains of Alzheimer’s patients. The company contends UB-311 could have advantages over Biogen Alzheimer’s drug Aduhelm, which is a monoclonal antibody therapy dosed every four weeks. Side effects associated with the Biogen drug include brain swelling and bleeding.
Through three years of repeat dosing so far in patients with mild-to-moderate Alzheimer’s, Vaxxinity reports that its drug has been well tolerated, showing no cases of brain bleeding or swelling. The company plans to advance the drug to a Phase 2b study in 2022 to assess the therapy’s efficacy. According to the IPO filing, that study will enroll about 670 patients with early Alzheimer’s disease. The main goal will be to assess the drug’s effect on decline in cognition and function over 78 weeks.
Another Vaxxinity program, UB-312, is in Phase 1 testing as a potential treatment for Parkinson’s disease and Lewy body dementia. A second Alzheimer’s treatment designed to address the buildup of the tau protein is preclinical, as are potential therapies for migraine and hypercholesterolemia.
Vaxxinity’s Covid-19 vaccine, UB-612, has completed Phase 2 testing. That vaccine is designed to activate both antibody production and cellular immunity against multiple parts of a viral antigen. The company reported that clinical trial results showed the vaccine generated antibodies that neutralize SARS-CoV-2, and also drove a T-cell response. However, Vaxxinity’s emergency use authorization application in Taiwan was turned down by regulators there, a decision the company is appealing.
The peptide technology underpinning Vaxxinity was initially developed within United Biomedical Inc. (UBI), a privately held biotech company with roots stretching back more than 35 years. UBI initially developed its peptide vaccine technology for animals, and the company has refined it over the past two decades, according to the IPO filing. To develop the technology for human use, Vaxxinity was formed in April by merging COVAXX and United Neuroscience, two companies that stemmed from UBI.
In addition to the corporate connections, Vaxxinity also has several family relationships. Co-founders Mei Mei Hu, Vaxxinity’s president and CEO, and Louis Reese, executive chairman of the company’s board of directors, are married, the filing states. Hu is the daughter of Chang Yi Wang, UBI’s founder and a member of Vaxxinity’s scientific advisory board.
According to the filing, Vaxxinity’s principal shareholders—those owning 10% or more of the company—voted to give Hu the authority to vote their shares at her discretion on all voting matters. That authority gives her 58.57% of the voting power, making Vaxxinity a “controlled company,” a business in which more than half of the voting power is held by a single person or group.
As of the end of September, Vaxxinity reported a cash position totaling $89.4 million. That capital, combined with the IPO proceeds, will fund development of the pipeline. About $90 million is set aside for the company’s chronic disease drug candidates, primarily the completion of Phase 2b testing of Alzheimer’s candidate UB-311. The cash will also be used to bring the preclinical programs in the pipeline through Phase 1 development. Between $15 million to $20 million is planned for the company’s Covid-19 candidate, which is being readied for testing as a booster shot for those who previously received a different vaccine. About $10 million is set aside for investing in the company’s technology and for new product candidates.
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