01 Mar Advanced Life Sciences to Hit the Road For $30 Million in Funding
After 16 years in the field and navigating at the helm of several companies, Michael Flavin, CEO of Advanced Life Sciences (which is located in Woodridge, Ill. across from Argonne National Laboratory), sees a current opportunity to fund and advance his drug discovery company.
Following a six-month preparation period, Flavin says he’ll be hitting the road in the next few weeks with financial adviser Legg Mason to raise about $30 million in funding.
Flavin isn’t without his challenges. Since funding his company from founder’s capital, government grants and about $3 million in SBIR ( small business innovation research ) grants, Advanced Life Sciences hasn’t successfully pushed a single drug through full FDA approval and into commercialization. That’s not to say he’s not en route.
Advanced Life Sciences currently has three top drug prospects. The first and furthest along is called Calanolide A, which is said to be the only naturally occurring anti-HIV agent at an advanced stage of clinical testing today. The compound was first isolated from the Malaysian rain forest and has $21 million in financial backing from the Malaysian government.
Calanolide A is designed to attack the HIV virus and prevent reproduction. Flavin says it has been tested in 190 humans including 46 with the HIV virus.
The compound is currently in Phase II clinicals. There are three phases one must go through in order to achieve FDA approval and subsequently go to market. Phase I is for determining safety, Phase II monitors effectiveness and Phase III is for testing in a large number of patients to verify that statistical significance holds up. After passage of all three phases, a company can then apply with the FDA for approval to sell a drug.
As a former Baxter employee, Flavin licensed ALS 886 from Baxter. The compound is designed to combat acute lung injury associated with infection. The well-known SARS virus often causes exactly that.
While this drug wouldn’t block viruses like SARS, Flavin says the goal with ALS 886 is to block the lung tissue damage caused by SARS. ALS 886 has been approved by the FDA to initiate clinical trials and is currently in Phase I clinicals.
Licensed from the University of Illinois at Chicago, ALS 357 is currently being tested against malignant melanoma (skin cancer) through animal testing. Flavin says his company will file with the FDA later in 2003 to initiate clinical trials for ALS 357.
Diamonds in the Rough
Discovering and developing a drug is anything but cheap. The process can also take a long time. These days, many companies are finding ways to circumvent the grueling process and make money by partnering and licensing later in a compound’s advancement. That’s not Flavin’s style.
“My background is in drug discovery. I have a very strong interest in coming up with new things that haven’t been found before,” he said. “Yes, it’s difficult and expensive, but it’s also very rewarding to see programs you worked on for five or 10 years actually helping people.”
Flavin says he looks for a financial return over the long term and is willing to ride out a risk in the short and medium terms. For companies that don’t want to defer a pot at the end of a rainbow to the end of the process, he says firms can receive royalties up front or milestone payments along the way from partners.
“The key to success in technology today is collaboration,” Flavin said, who says his firm looks for the “diamonds in the rough” that no one else is pursuing before putting any money behind an idea. “Still, we would rather partner than compete if someone else was developing a similar product.”
Flavin says Advanced Life Sciences always tries to identify promising drug compounds early on through licensing and other opportunities and then develop them through pre-clinical and animal testing. After Phase II, he says Advanced Life Sciences will partner with larger pharmaceutical companies for traction through the later stages.
Though Advanced Life Sciences hasn’t made it there yet, Flavin points to Calanolide A as his company’s first mover.
Down the road, Flavin says Advanced Life Sciences wants to go public. After founding Advanced Life Sciences in 1998 through the spin off of Medichem Life Sciences (which Flavin started in 1987, went public in late 2000 and was later acquired by deCODE genetics), he says another three or four years is still needed before his current firm could be thinking thoughts of public stock trading.
Until then, Flavin says Advanced Life Sciences is staying in Chicago.
“We love being in the Chicago area. I am a Chicago native and have been committed to being here for the last 15 years,” he said. “Chicago has tremendous resources. You can’t find better universities or a better talent pool. Yes, Chicago is slower to develop in terms of an overall biotech cluster because of the entrepreneurial culture, but it will happen and money will flow here.”
Flavin’s ultimate goal for Advanced Life Sciences is to produce drugs – or a drug – to sell to Merck and the nation’s other large pharmaceutical companies. He added: “It can be a race to the end but you try to envision yourself as a large company that’s just young and you put in the mechanisms to compete and become an expert at what you do.”
With 14 full-time employees today, Flavin says Advanced Life Sciences is currently scheduled to break even in 2005.
Adam Fendelman is Editor-in-Chief of ePrairie.com and specializes in telecommunications in the Chicago area. He can be emailed at email@example.com. This article has been syndicated on the Wisconsin Technology Network courtesy of ePrairie, a user-driven business and technology news community distributed via the Web, the wireless Web and free daily e-mail newsletters. They can be found at www.eprairie.com.