The potential of an oral therapy that could treat autoimmune disease by preventing the activation of T cells against self antigens while preserving the immune system's activity against external pathogens proved promising enough for small 2013 start-up Artax Biopharma Inc. to attract one of biotech's biggest names.

Former Genzyme CEO Henri Termeer – along with Advent Life Sciences – led the $10 million series B round, disclosed Tuesday morning by Cambridge, Mass.-based Artax. Existing investors, including A.M. Pappas, also participated.

Funds will allow Artax to conclude the ongoing phase Ib trial of lead compound, AX-024, and complete a proof-of-concept phase IIa study in patients, as well as advance research on additional compounds, said Damià Tormo, founder and CEO.

Artax's work is based on discoveries emerging from the lab of Balbino Alarcon at the Spanish National Council on the role of Nck in T-cell activation, specifically the interaction between Nck, a member of the SH2/SH3 family of cytoplasmic adapter proteins, and T-cell receptor activation. Work in Alarcon's lab "went even further to look for a target that could be druggable," Tormo said. "We saw the data and started the company."

Autoimmune disease, which occurs when an adaptive immune response reacts to self antigens, has been tricky to treat. While there are currently available therapies for treating autoimmune disease, many work by weakening or suppressing the immune response, which leaves the body vulnerable to external pathogens.

By inhibiting Nck, AX-024 is designed to work as a selective immunomodulator of T-cell receptor signaling, leaving untouched the T cells that are taking care of external threats such as viruses and bacteria, Tormo said.

So far, the drug has demonstrated proof of concept in models of diseases such as multiple sclerosis, psoriasis, inflammatory bowel disease, type 1 diabetes and graft-vs.-host disease. And in phase I studies to date, the orally dosed compound has proved well tolerated in healthy volunteers. "At very high doses, the compound is very selective and we find no side effects," Tormo told BioWorld Today.

Early work also has shown that AX-024 appears to have immunomodulatory effects on T cells, according to specific biomarkers, either showing that it stops the proliferation of T cells or the secretion of cell cytokines such as Th17, Th2 and Th1.

Artax hasn't disclosed an initial indication. "We're waiting on our phase Ib," Tormo explained. "It will give us a lot of info to prioritize the first indication." That decision likely will come by the end of the year.

"Until now, all the compounds had effects against our own defenses, so I think if [AX-024] really works the same way it's worked in all the animal models, it will really change the treatment for many, many patients," he added.

That kind of potential – Artax cites estimates showing that autoimmune and inflammatory disease affect roughly 5 percent to 8 percent of the worldwide population – means the small firm will almost certainly require some big pharma muscle in the future. "What we want to do is drive the project ourselves, at least until the end of phase II [and] prove it works," Tormo said.

After that, the efforts will focus on getting the drug to patients, "so we will take the best chance for the drug to get there."

Artax, which Tormo named after a famous thoroughbred racehorse, previously raised about $4 million and operates a "very lean structure," relying largely on the expertise of its board and scientific advisory board members. With the closing of the series B, Artax adds Termeer's name to that roster.

Termeer, since stepping down as the head of Genzyme Corp. shortly after its acquisition by Sanofi SA in 2011, has remained active in biotech, sitting on the boards of a number of organizations and companies such as Aveo Pharmaceuticals Inc., Moderna Inc. and Verastem Inc. He's co-founded start-ups such as Lysosomal Therapeutics Inc. and Proqur Therapeutics BV, which priced an impressive IPO late last year. He's also backed Aura Biosciences Inc., a company developing tumor-targeted breakthrough therapies for rare cancers, participating in that firm's $21 million series B in March. (See BioWorld Today, May 13, 2014, and Sept. 19, 2014.)

Joining Termeer on Artax's board is Raj Parekh, general partner at Advent Life Sciences.