Privately held Axerion Therapeutics Inc. hopes to translate two technologies exclusively licensed from Yale University into revolutionary therapeutics in a pair of indications – spinal cord injury (SCI) and Alzheimer's disease (AD) – that have bedeviled biotechs and big pharmas, alike.

With funding from Yale, Axerion was launched in late 2009 by the investment firm Scheer & Co. to develop and commercialize the platforms, discovered in the lab of neurology and neurobiology scientist Stephen Strittmatter at Yale School of Medicine. They include a Nogo decoy receptor for chronic SCI and related neurological diseases, and blockers of amyloid-beta oligomer binding to cellular prion protein (PrPc) on the cell surface of neurons as a therapeutic target for AD.

The Nogo program was housed for a time at Biogen Idec Inc., of Weston, Mass., which returned the rights to Yale during a strategic reshuffling. Axerion snagged the asset shortly afterward, according to Sean Cassidy, the company's chief financial officer.

In April 2010, the Branford, Conn.-based start-up attracted $750,000 in seed funding from Connecticut Innovations and a grant from the National Institutes of Health (NIH) to develop the decoy receptor, a fusion protein that consists of the ectodomain of NgR1 fused to IgG1. The molecule, known as NgR(310)ecto-Fc, binds to all three ligands – Nogo-A, myelin-associated glycoprotein (MAG) and OMgp – effectively blocking the body's natural inhibitors of axonal sprouting and regeneration. Resumption of axonal growth leads to the potential for enhanced recovery, Cassidy explained.

The company's name is a play on the axonal regeneration program.

"We're the only therapeutic that has demonstrated the potential to work in a chronic setting," Cassidy told BioWorld Today. Although biotechs such as Neuralstem Inc., Athersys Inc., Pluristem Therapeutics Inc. and StemCells Inc. have generated buzz in SCI, their approaches feature stem cell treatments.

Targeting chronic SCI gives Axerion the ability to run smaller trials and to recruit more quickly. Recovery of function tapers off around six months following SCI and ceases altogether at about one year. At that point, "it's easy to measure any recovery of motor function," Cassidy pointed out. "You can actually take patients and utilize them as their own baseline."

The targeting of three inhibitory ligands is a key mechanistic reason for Axerion's confidence in the Nogo program in chronic SCI. A Nogo antibody in development by Novartis AG in acute SCI and similar antibodies at GlaxoSmithKline plc targeting amyotrophic lateral sclerosis and myelin-associated inhibitory pathways can only bind one inhibitor, explained George Maynard, Axerion's vice president of preclinical development.

"Blocking one inhibitor or single receptor is going to be less effective than our approach, with a receptor decoy that potentially will bind and then activate the effects of all three myelin-associated inhibitors," he explained.

The company needs about two years to complete preclinical safety studies and GMP manufacturing work before filing an investigational new drug (IND) application, according to Maynard. A Phase I proof-of-concept study could recruit ASIA-A, B and C patients and then "be data-driven in terms of how we refine the patient population going forward" into pivotal trials, he said. "We think we would be able to detect evidence of efficacy fairly quickly."

In December, Axerion was selected for participation in the NIH's Bridging Interventional Development Gaps program, which will help the company to conserve capital by providing no-cost access to NIH therapeutic development contractor resources and supporting key activities, such as preclinical toxicity studies, required for the IND submission. The company plans to meet with the FDA and refine its clinical plan once it completes preclinical safety and pharmacokinetics studies.

In April 2012, Axerion signed an exclusive sublicense with AstraZeneca plc's Neuroscience Innovative Medicines Unit to conduct research, develop and commercialize the preclinical AD biologic. Axerion received an undisclosed up-front payment and is entitled to milestone payments, royalties on product sales and research and development funding during the collaboration period.

Not only is AstraZeneca funding some of Axerion's FTEs, but there's a potential strategic payoff. While the big pharma is focused on a biologics approach to the PrPc pathway, Axerion retained global rights to a small-molecule approach and is actively seeking grant funding to advance its internal work, which avoids the amyloid-beta clearance and selectivity issues that have plagued other experimental AD compounds.

"We've identified the key high-affinity binding sites on neurons for the toxic oligomeric form of amyloid-beta," Maynard pointed out. "We're blocking, specifically, that binding interaction."

With a handful of employees, the company has prevailed on about $2 million in seed funding in addition to government grants. Axerion hopes to move to the next level by raising a $15 million series A to finance the Nogo program through Phase I.

Long term, the internal debate is not whether or not to partner, but at what stage.

"We obviously made the decision to partner our biologics program early," Cassidy said. "We could partner our small-molecule approach under the same pathway, or we may have the ability to develop that through the granting process."

With respect to the Nogo program, "once we start to see evidence the molecule is providing efficacy in humans, we would do market checks on the program," he added.