LONDON - Axis Genetics plc, which is developing vaccines in plants, has fallen victim to the spiral of adverse publicity about genetically modified (GM) foods that has hit the UK this year, and gone into administration after failing to complete a #10 million (US$16 million) funding round.
"Investor sentiment toward biotechnology in general is poor," Axis CEO Ian Cubitt told BioWorld International, but the GM food row "was the final nail in the coffin. Overall the failure to complete the funding round is a reflection of the fact that we work with plants, even though we are aiming at pharmaceuticals, not food."
He said some investors had been put off by the GM food controversy, even though he had pointed out that the environmental pressure group Greenpeace has said it is not against the use of genetic engineering for the production of pharmaceuticals.
The company, which is not quoted, is the first significant UK biotech to put itself in administration. Axis, based in Cambridge, has just completed a Phase I trial of an oral hepatitis B vaccine delivered by a sample of genetically engineered potato. The trial was carried out in collaboration with the Roswell Park Cancer Institute, of Buffalo, N.Y., and the Boyce Thompson Institute for Plant Research at Cornell University.
In the placebo-controlled, double-blind study, volunteers who had previously responded to a licensed, injectable vaccine received an oral booster dose. Cubitt said the study was ready to be analyzed, but it was not clear when this would happen.
Cubitt said he hopes Axis will be sold as a going concern. But of 50 employees, 25 were laid off last week and by the end of this week only 10 will remain. Cubitt noted, "We are hoping to keep the core skills. In a company like Axis where most of the assets are in intellectual property, a lot of the value lies in the people."
The company owns technologies for producing vaccines in fruits and plants, and has also invested in developing manufacturing processes to extract the vaccines.
Cubitt expects other companies will hit the same problem. While there is plenty of money for start-ups, and the quoted companies are managing despite the poor state of the market, it is increasingly difficult for mid-stage companies to raise money.
"We are not going to be alone," he said, "Companies at our stage of development, moving into clinical trials, need increasing quantities of money." Cubitt added that the problem is compounded because at present there is no prospect of going public.
Public concern over GM foods has been gathering force all year. It has resulted in the main UK supermarket chains, and leading food manufacturers, refusing to stock or make food with genetically modified ingredients, most notably GM soya. A number of GM crop trials have been sabotaged, with protestors arguing the GM pollen would contaminate other plants. The government has been forced to reassess its GM foods approvals process.