3 WELL FUNDED BIOTECH INNOVATORS

As interest rates have risen sharply over the last year, “survival” has become the name of the game for early stage biotech companies. Higher interest rates both make it more expensive to fund money losing operations, and make rival investments more attractive than many nascent biotechs.  Here are three biotech companies that maintain positive momentum in their ground breaking research, and likely have enough funding in place to become viable businesses. 

By Nathaniel Suryabudi, Biotech Analyst 

The biotechnology industry is renowned for its potential to revolutionize healthcare through innovative therapies and treatments. Within this dynamic landscape, some emerging biotech companies are capturing attention despite their current lack of profitability. These companies possess a common thread that sets them apart: promising pipelines brimming with potential breakthrough therapies that could transform patient care in the future.

In this article, we delve into the world of biotech companies that are not yet profitable but offer a glimpse into a future filled with groundbreaking advancements. We explore three such companies that have dedicated their efforts to pioneering novel treatments and leveraging cutting-edge technologies to tackle unmet medical needs. These companies are on the precipice of transforming the healthcare landscape, with their pipeline candidates showing immense potential for treating a wide range of diseases.

While profitability is a crucial metric for the long-term sustainability of any business, it is equally important to recognize the significant investments and time required for biotech companies to bring their discoveries to fruition. Despite the absence of current profitability, these companies have captured the attention of industry experts, investors, and patients alike due to their innovative approaches and promising pipeline candidates.

Through this article, we aim to shed light on the notable achievements and ongoing research efforts of three biotech companies: Axsome Therapuetics, Voyager Therapeutics, and Unity Biotechnology, Inc. We will delve into their respective areas of focus, highlight key pipeline candidates, and discuss the potential impact these companies could have on patient care and the biotech industry as a whole.

Axsome Therapeutics ($AXSM) 

Axsome Therapeutics, Inc. is a clinical-stage biopharmaceutical company headquartered in New York City. The company was founded in 2012 with a focus on developing novel therapies for central nervous system (CNS) disorders.

Axsome Therapeutics aims to address unmet medical needs in the field of CNS disorders by developing innovative treatments that target specific pathways and mechanisms of action. The company’s approach involves identifying and repurposing known compounds or developing new chemical entities to create potential therapeutics.

One of the notable aspects of Axsome Therapeutics is its emphasis on a precision medicine approach. The company strives to identify patient subpopulations that may respond better to their therapies, allowing for more targeted and effective treatments. This personalized medicine strategy has the potential to improve clinical outcomes and minimize side effects.

Some of their most promising medicines include AXS-05 (bupropion/dextromethorphan).

AXS-05 is a combination of bupropion and dextromethorphan being developed for multiple CNS disorders. It has shown promise in the treatment of major depressive disorder (MDD), treatment-resistant depression (TRD), Alzheimer’s disease agitation, and smoking cessation. AXS-05 has received Fast Track designation from the U.S. Food and Drug Administration (FDA) for certain indications.

AXS-07 (MoSEIC™ meloxicam/rizatriptan):

AXS-07 is a combination of meloxicam, a nonsteroidal anti-inflammatory drug (NSAID), and rizatriptan, a 5-HT1B/1D agonist. It is being developed for the acute treatment of migraine and has demonstrated positive results in clinical trials. AXS-07 has received a Breakthrough Therapy designation from the FDA for the acute treatment of migraine.

AXS-12 (reboxetine):

AXS-12 is a selective norepinephrine reuptake inhibitor being developed for the treatment of narcolepsy. It aims to address excessive daytime sleepiness and cataplexy associated with this neurological disorder.

Axsome Therapeutics believes that it has ample financial resources to support its operations and reach a positive cash flow based on its current operating plan. The company already has at least three agents in phase three testing, the final phase before a drug is approved by the FDA. In light of this clinical momentum, the company’s existing cash reserves, combined with the remaining committed capital from the $350 million term loan facility, are deemed sufficient to fund anticipated operations. 

This financial position indicates that Axsome is well-prepared for the future. By having the necessary funding, the company can continue executing its clinical development programs, conducting research, and advancing its pipeline of novel therapies for CNS disorders.

Voyager Therapeutics ($VYGR) 

Voyager Therapeutics is a biotechnology company focused on developing gene therapies to treat severe neurological diseases. Founded in 2014 and based in Cambridge, Massachusetts, Voyager Therapeutics aims to address the unmet medical needs of patients by utilizing adeno-associated virus (AAV) vectors to deliver therapeutic genes to specific cells in the central nervous system (CNS).

The company’s approach involves using viral vectors to deliver genetic material to target cells within the CNS, aiming to provide long-term, potentially curative treatments for a range of severe neurological disorders. By leveraging the power of gene therapy, Voyager Therapeutics aims to address the underlying causes of these diseases at a genetic level.

Voyager Therapeutics has developed a modular gene therapy platform known as the Voyager VTR(TM) technology. This platform encompasses several components, including the selection of specific AAV vectors, engineering of optimized gene cassettes, and advanced manufacturing techniques. These elements come together to enable precise and efficient delivery of therapeutic genes to targeted cells within the CNS.

The company’s pipeline includes investigational therapies for various neurological disorders, including Alzheimer’s disease, Huntington’s disease, amyotrophic lateral sclerosis (ALS), and Friedreich’s ataxia. Each program utilizes Voyager’s gene therapy approach to target specific genes or cellular pathways associated with the respective disease.

All of Voyager’s medicines are in the early stages of research. However, because they focus on diseases that have serious unmet needs it may be smart to view them as a long-term project.

Voyager is dedicated to maintaining a robust balance sheet that effectively supports the advancement and expansion of its platform and pipeline. The company consistently evaluates its anticipated cash requirements for both present and future periods.

Voyager’s strategic objective is to ensure that it has ample financial resources to drive the progress of its operations. The company expects that its current holdings of cash, cash equivalents, and marketable securities, along with the $25.0 million options exercise payment received from Novartis in April 2023, will provide substantial support. In total, the company currently holds more than $300 million in cash. Additionally, Voyager anticipates receiving reimbursements for development costs through its collaborations with Neurocrine. 

This strong financial standing enables Voyager to confidently address its planned operating expenses and capital expenditure needs until 2025. By having sufficient resources, the company can continue its research and development efforts, clinical trials, and potential commercialization activities without being constrained by financial limitations.

Unity Biotechnology ($UBX) 

Unity Biotechnology is a biotechnology company focused on developing therapeutics to extend health span, with a particular emphasis on treating age-related diseases. The company, founded in 2009 and based in Brisbane, California, aims to address the underlying causes of aging and age-related diseases by targeting senescent cells.

Senescent cells are damaged or dysfunctional cells that accumulate in various tissues as a person ages. These cells secrete inflammatory molecules and other factors that contribute to chronic inflammation and tissue dysfunction, which are associated with age-related diseases such as osteoarthritis, age-related macular degeneration (AMD), and diabetic kidney disease.

Unity Biotechnology’s approach involves developing small molecule drugs and biologics that selectively eliminate senescent cells, aiming to restore tissue homeostasis and promote healthier aging. By targeting senescent cells, the company aims to alleviate the burden of age-related diseases and improve overall health span.

One of their most promising medications is UBX1325. UBX1325, a potent Bcl-xL inhibitor, represents a novel approach to treating age-related eye diseases. It is designed to selectively eliminate senescent cells that accumulate in diseased blood vessels of the eye while leaving healthy blood vessels intact. By specifically targeting and removing these senescent cells, UBX1325 aims to restore vascular integrity, reestablish barrier function in the eye, and potentially reverse disease progression.

Senescent vascular cells are believed to compromise the integrity of blood vessels and release inflammatory factors that contribute to the pathogenesis of conditions like DME, AMD, and diabetic retinopathy (DR). UBX1325 inhibits Bcl-xL, a protein highly expressed in pathological blood vessels in the retina, and promotes apoptosis (cell death) of the diseased senescent cells. In preclinical studies, a single dose of UBX1325 led to the selective elimination of senescent cells in diseased vasculature, allowing functional, healthy blood vessels to reorganize and regenerate.

The development of UBX1325 offers a potential alternative to current treatment modalities, providing a more targeted approach to neovascular treatments for eye diseases. By selectively removing senescent cells and sparing healthy blood vessels, UBX1325 may address the limitations of existing therapies that impact both diseased and healthy vessels.

In addition to its potential efficacy, UBX1325 may also offer advantages in terms of treatment burden. Current anti-VEGF therapies typically require initial loading doses followed by ongoing dosing at regular intervals, which can be demanding for patients. As UBX1325 represents a new class of therapy, it has the potential to provide a viable and much-needed alternative, potentially reducing the treatment burden and improving patient outcomes.

It’s important to note that while the potential of UBX1325 is promising, further clinical studies and regulatory approvals are needed to confirm its safety and efficacy in treating age-related diseases of the eye.

Unity, as of March 31, 2023, had a total of $83.4 million in cash, cash equivalents, and marketable securities. This figure represents a decrease from the $94.8 million reported as of December 31, 2022. Despite this decrease, UNITY believes that its current financial resources are adequate to sustain its operations until the fourth quarter of 2024.

While Unity maintains a decent financial standing, it is worth noting that its financial position may not be as strong as companies like Voyager and Axsome Therapeutics. The relatively lower cash reserves compared to those companies suggest that UNITY may have less financial flexibility or a potentially shorter runway to support its operations and planned activities.

While UNITY’s financial position may not be as robust as some of its peers, the company may have strategies in place to manage its cash flow effectively, explore potential collaborations, and optimize its resources to advance its pipeline of therapies. As with any biotech company, UNITY’s financial standing is subject to market conditions, the progress of its clinical trials, regulatory outcomes, and competition within the industry. Unity may be a speculative play for an investor who is comfortable with risk.