NRC collaboration accelerating AvidBiologics' transition to drug development company

The National Research Council (NRC)'s extensive partnership with a Toronto-based virtual start-up has resulted in the firm securing its second financing round from an all-Canadian venture capital syndicate. AvidBiologics Inc will use the funding to advance its lead drug candidate into clinical trials by pursuing regulatory approval for investigational new drug (IND) status.

Fortified by a strong relationship with the pharmaceutical biologics ecosystem in Canada — especially in Quebec — Avid is transitioning towards becoming a fully staffed, development-stage drug company. Avid spun out of YM Biosciences in 2011 under the leadership of Ilia Tikhomirov an entrepreneur and YM's former associate director of science. Tikhomirov was central to YM's development of antibody-drug conjugate (ADC) technologies which he brought to Avid for further development in conjunction with the NRC, Western Univ and the University Health Network. Guidance on Avid's platform technology and lead candidates was also provided by scientists from Philadelphia PA-based Fox Chase Cancer Centre.

"While I was at YM, I formed a partnership with NRC for antibodies production and that led to the creation of a new antibody platform. YM spun out the IP (intellectual property) co-developed with NRC into Avid," says Tikhomirov. "We did an initial seed round to conduct further research and proof-of-principle studies and validated our lead candidate … NRC generated most of the data that led to the latest financing and we've ramped up our collaboration with them to a new scale for development activities."

Tikhomirov says Avid will pursue a break-through designation for its lead drug candidate which targets breast, lung and head-and-neck cancers by destroying diseased cells with minimal impact on healthy cells. The size of the latest financing round — led by Lumira Capital – has not been disclosed but Tikhomirov says it's in the "few million" range — enough to take the lead candidate "into the clinic".

"We'll need another round of $5 million or more to do clinical trials by the end of 2015," he says.

Canada's best kept secret

Tikhomirov says tapping into the expertise of NRC's Human Health and Therapeutics (HHT) portfolio — augmented with advisory scientists and consultants — has allowed Avid to accelerate its evolution to a full-fledged biopharmaceutical firm. The bulk of Avid's collaboration with NRC is through the HHT portfolio's Montreal contingent (formerly known as the Biotechnology Research Institute or BRI prior to NRC's restructuring).

"BRI is the best kept secret in Canada. We had a VC visit us recently and when we presented the NRC's capabilities and the companies that NRC help to build, the VC had no idea NRC was so influential. I hope more research institutes can replicate the model," says Tikhomirov.

Avid has licensed its antibodies from the NRC for further co-development and is also tapping into HHT's manufacturing technologies and processes which it plans to transfer to a contract research organization once its drug reaches production stage.

All-Canadian initiative

Tikhomirov says Avid's financing and entire supply chain and support network are predominately Canadian, although he notes that the firm's future requirement for larger sums of funding could involve non-Canadian sources.

"What's important is the right environment to make things work, not just the financial markets. We hope to produce product in Canada but this will take work to do this," he says. "Relationships and ecosystems matter and do create stickiness that should not be underestimated."

For its collaboration with Avid, NRC is drawing upon four research groups in Montreal and Ottawa. In addition to prioritizing and co-developing drug candidates, NRC has been instrumental in assisting in generating valuable data and sharing its manufacturing expertise.

"The objective of the NRC is to have an impact and footprint in Canada with Canadian industry. This is one of our most in-depth collaborations ... It's a good match that is rapid and demanding ... We've learned a lot about tools, know-how, enabling technologies and non-competitive assays," says April Luong, a client relationship leader with HHT. "Avid needs to derisk its technologies to attract VC and needed NRC to do it. There's no other place in Canada to get all these elements in one place."

With more than 300 scientists and a new cadre of staff with industry experience, HHT is the country's largest biologics research team outside of industry. With NRC's new industry-facing orientation, the VC sector is responding to the new opportunities arising from its collaborative activities.

With Lumira as lead investor, other firms in the latest financing round, include MaRS Investment Accelerator Fund, MaRS Innovation, Merck Lumira Biosciences Fund, Rosseau Asset Management and Avid's founding investors.

"AvidBiologics has the potential to be a great illustration of the NRC's new business model. There's a new attitude and new culture at NRC," says Dr Brian Underdown, managing director at Lumira Capital and an Avid board member. "I recently went to the NRC (the Montreal branch of the HHT portfolio) and was extremely impressed with the people and willingness and enthusiasm of their people. BRI has benefitted from the recent downsizing of pharma in Montreal."

Underdown says NRC is well attuned to the new financing and development paradigms now shaping the life sciences sector.

"In the past five-to-seven years in the life sciences space, because product development is so expensive, companies that are able to begin virtually and use less capital have become de rigueur in the venture capital community," says Underdown. "We don't want them to build out too quickly before they build value so you outsource functions you don't need in-house."

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