Oxford Sciences Innovation has contributed to a banner week for University of Oxford spinouts. The £320 million ($462 million) fund, which lists Google Ventures and Neil Woodford among its backers, participated in a £37 million flurry of investment in Oxford newcos, including a £16.9 million round in a startup with aspirations to unlock the regenerative capabilities of the human body.
The university set up the fund with its tech commercialization subsidiary last year to give researchers with ambitions to spin out their work a first port of call for funding. This week’s spate of financings, which move the spinout count for 2016 close to the tally for all of last year, provide evidence that the fund is delivering on this brief. OxStem, the aforementioned regenerative medicine startup, tapped the fund for some its cash. And exosome drug delivery specialist EvOx Therapeutics and universal flu vaccine player Vaccitech both relied on the fund for the £10 million each they needed to get started.
Each of the startups is going after a big idea. EvOx is pursuing the potential to use exosomes to ferry therapeutic payloads across the blood-brain barrier. If successful, the approach could open the door to a new generation of treatments for diseases including dementia. A lot of work stands between EvOx and this scenario. Vaccitech is rather closer to the finish line. A 1,500-person Phase IIb trial of its universal flu vaccine is due to start this year. And an early-stage trial of a cancer vaccine Vaccitech envisages pairing with checkpoint inhibitors is already underway.
If either EvOx or Vaccitech overcome the odds and contribute to a product that comes to market, they stand to have a notable impact on human health. The ambition of the third spinout, OxStem, is arguably greater still. OxStem is a holding firm for seven therapeutically divided daughter companies. The business is aiming to pair understanding of the differentiation steps stem cells go through before becoming committed to a particular tissue with medicinal chemistry expertise to design drugs that trigger the regeneration of parts of the body.
“We're taking these known tissue-specific stem cells which lie dormant ... and then using a particular phenotypic screen to look for small molecules that can turn these systems back on,” OxStem CEO Mark Stein told FierceBiotech. “We know that that's possible.” Stein’s confidence is underpinned by research OxStem’s scientific team--the University of Oxford professors and serial entrepreneurs Steve Davies, Dame Kay Davies and Angela Russell--has carried out in Duchenne muscular dystrophy. The professors are all involved with DMD upstart Summit Therapeutics ($SMMT).
OxStem is initially applying the concept to oncology, cardiac failure, neurodegenerative diseases and macular degeneration. Daughter companies focused on the regeneration of the gut, pancreas and blood are also in the works. Each therapeutically focused subunit will leverage assay development know-how and other capabilities possessed by the holding company. “Part of what we've done is we've been able to grow stem cells stably in culture. That's been one of the big achievements of the team,” Stein said. Each daughter company will tap into this achievement.
Over the next few months, the first wave of daughter companies will fine-tune OxStem’s assay for use in their particular phenotypic screening programs. The teams will then start the screening process in search of hits. “We expect to find novel biochemistry. There's a very limited number of people doing this sort of drug discovery approach around the world, specifically using tissue-committed stem cells,” Stein said. The potential of the approach has attracted the attention of J. Craig Venter and a pair of former Pharmacyclics executives.
These connections to big names in biotech could prove valuable as the daughter companies grow. The plan is for the companies to partner with biopharmas once they reach a certain point in development. Further down the line, OxStem plans to exit the subsidiaries through IPOs and trade sales. The parent-daughter company structure means the members of each team stand to benefit from their own success. “We wanted to create a structure so that there was a maximum incentive within each of those discrete teams,” Stein said.