Affymax Inc. closed a $20 million private round of financing that coincided with the drug discovery and development firm's appointment of a new chief executive.
"Its pipeline of clinical candidates have been identified and continue to move forward," Lori Rafield, a board member at Affymax and a general partner at lead investor Apax Partners & Co., told BioWorld Today. "Combining that with [new President and CEO] Arlene Morris joining, and to us it was an outstanding investment opportunity."
The Palo Alto, Calif.-based company said the funding would last more than two years, providing enough cushion to support plans to push its lead product, Hematide, into the clinic in the latter part of this year. The peptide is designed to mimic the activity of a red blood cell-stimulating protein called erythropoietin (EPO).
"It is an EPO mimetic novel sequence that does not look anything like the natural EPO or recombinant EPO molecule," Rafield said. "It has activity both in animals and in vitro, equivalent to the recombinant EPO."
Beyond Hematide, the company's pipeline has grown since its spin-off from GlaxoSmithKline plc nearly two years ago. Affymax's investors purchased its chemistry and screening platform technologies from the London-based pharmaceutical giant, which at the time retained a 23 percent share in Affymax. Led by the former Patricof & Co. Ventures Inc., which now flies under the Apax banner, the investor group poured $51 million into the firm at the time. (See BioWorld Today, Aug. 2, 2001.)
Originally formed in 1988 as Affymax NV, the company subsequently was purchased for more than $500 million by Glaxo more than eight years ago. The acquisition also brought on board part of Affymax's subsidiary, Santa Clara, Calif.-based Affymetrix Inc., in which Glaxo still holds equity. (See BioWorld Today, Jan. 27, 1995.)
A passive investor, GlaxoSmithKline's shares have voting rights - it does not have a seat on the board nor any product or technology rights. Rafield declined to specify GlaxoSmithKline's current holdings in Affymax, nor did she disclose the share distribution among any other investors.
But she acknowledged that its largest shareholder remains Apax, which maintains offices around the world, including in Palo Alto.
Affymax's drug discovery platform, Recombinant Peptide Diversity, spurs its development of small peptide drugs for cancer and immune-mediated diseases. Its approach is designed to produce stable peptide drugs that are easily manufactured, reduce immunogenicity, improve dosing convenience and can be stored at room temperature.
The company plans to push preclinical development of several other peptides within the next nine months, including a granulocyte-colony stimulating factor (G-CSF) agonist to enhance white blood cell formation, and a TRAIL R2 agonist to treat a range of cancers.
"The G-CSF mimetic is a novel sequence with a novel composition of matter," Rafield said. "It has activity equivalent to the recombinant material, and is probably six months behind the EPO mimetic in terms of entering clinical studies."
She said the TRAIL R2 agonist, a new chemical entity, has yet to enter preclinical development.
Affymax is looking to tap Morris' experience in pushing product development and putting together partnerships. Most recently, she was the president and CEO of Clearview Projects, an advisory firm that counsels biopharmaceutical and biotechnology companies on strategic transactions.
"She's probably one of the most experienced and biggest dealmakers in the industry," Rafield said. "So in terms of commoditizing assets in a financially constrained market, that's a nice skill set to have. And she's a household name - most people in the private equity business know who she is."
Prior to that, Morris was the senior vice president of business development at Seattle-based Corixa Corp. She had held the same position at South San Francisco-based Coulter Pharmaceutical Inc., which Corixa acquired nearly three years ago in an all-stock deal that brought Bexxar on board. Affymax said Morris completed the nearly $1 billion merger, as well as a 1997 contractual joint venture centered on the same cancer vaccine between Coulter and GlaxoSmithKline. (See BioWorld Today, Oct. 17, 2000.)
Together with Apax, Affymax's latest investment round included two other returning venture capital firms - New York-based Sprout Group and Boston-based MPM Capital. Each has one representative on Affymax's four-person board, which includes Rafield, Sprout's Kathy Laporte and MPM's Nicholas Galakatos.