WALTHAM, Mass. – As the Massachusetts Life Sciences Center (MLSC) today launched the seventh round of its Accelerator Loan Program, the MLSC also announced that Lexington-based Avaxia Biologics Inc., an Accelerator company awarded $375,000 in 2010, has paid back its loan early after successfully raising $6.4 million in its Series B financing round. The company’s repayment totaled $459,362.
The Accelerator Loan Program is the MLSC’s flagship investment program that provides working capital to early-stage life sciences companies. Launched in 2009, the program offers loans of up to $1 million per company and seeks to “de-risk” start-up companies that are in need of financing to serve as flexible working capital or for the purchase of capital assets.
The Accelerator Loan Program provides support to companies at a critical stage of their development cycle, enabling them to conduct vital research and proof of concept studies, and attract subsequent investment while improving the odds of bringing cutting-edge innovation to the marketplace. The MLSC is now accepting applications for the next round of the program, which are due by noon EST February 8, 2013, on the MLSC’s web site at www.masslifesciences.com.
To date, the Accelerator Loan Program has awarded $15.1 million in loans to 24 companies, which have generated more than $105 million in additional equity or acquisition proceeds. Six of these companies -- Good Start Genetics, InVivo Therapeutics, 4s3 Bioscience, Pluromed, MoMelan and most recently Avaxia Biologics -- have paid back their Accelerator loans early with interest.
Avaxia Biologics Inc. is a privately-held, clinical-stage biopharmaceutical company based in Lexington, Massachusetts. Avaxia is a leader in the growing field of gut-targeted therapeutics — orally administered, minimally absorbed drugs that are designed to act locally in the gastrointestinal tract. Avaxia’s lead clinical candidate, AVX-470, is an oral anti-TNF antibody for inflammatory bowel disease. This transformative product offers potentially improved safety and efficacy over existing anti-TNF therapies by focusing immune suppression only where needed in the diseased gut. On November 27, 2012, the company announced that the U.S. Food and Drug Administration (FDA) cleared the Investigational New Drug (IND) application for AVX-470 for the treatment of ulcerative colitis. Avaxia expects to initiate a Phase 1b clinical trial of AVX-470 in patients with active ulcerative colitis in early 2013. Avaxia is using its proprietary oral antibody platform to develop gut-targeted therapeutics to address many other serious diseases such as type 2 diabetes, celiac disease, GI acute radiation syndrome and oral mucositis.
“The Accelerator loan from the MLSC was of critical importance to Avaxia’s early growth,” said Barbara S. Fox, CEO of Avaxia. “The MLSC reviewers evaluated our programs, identified the key areas we needed to address in order to successfully raise private funding, and provided the resources we needed to clear those initial hurdles. That early funding and the credibility that came with MLSC support allowed us to raise funds and advance our lead product into clinical testing for ulcerative colitis. We have now raised a total of $10.5 million from private investors and have hired 13 full-time employees in Massachusetts. We honestly would not have been able to get there without the support of the taxpayers of Massachusetts, and we are proud to be able to repay the loan in full.”
“The Center’s Accelerator Program fills a critical gap in the life cycle of promising early-stage companies that are bringing new technologies to the marketplace,” said Dr. Susan Windham-Bannister, President & CEO of the Massachusetts Life Sciences Center. “Through this program we provide the Center’s endorsement of promising young companies, promote their visibility and create leverage for the institutional investors who can further help move these companies forward. Several of our Accelerator companies were started by female entrepreneurs, and we extend special congratulations to Barbara as the first female entrepreneur to repay an Accelerator loan. Avaxia’s success in raising private capital is the latest validation that the Accelerator program meets an important market need. We are very pleased to accept the early repayment of Avaxia's loan, and we commend the company on its progress in developing new therapies for ulcerative colitis.”
As in all past rounds of the Accelerator Loan Program, applications will be subjected to a rigorous evaluation process, including a double-blind peer review, evaluation by the MLSC’s Scientific Advisory Board (SAB) and further screening by the MLSC’s Investment Sub-committee of the Board of Directors, which includes an in-person Q&A by selected companies and live presentation by finalists. Final awards are scheduled to be announced by the MLSC’s Board of Directors in May of 2013. Information sessions for potential applicants will be held throughout January in various locations. Dates and locations are listed on the MLSC’s web site.
“We look forward to reviewing the seventh round of Accelerator Loan Program applications,” said Dr. Harvey Lodish, Chair of the MLSC Scientific Advisory Board, Member of the Whitehead Institute for Biomedical Research, and Professor of Biology and Professor of Bioengineering at MIT. “Composed of leaders from Massachusetts’ universities and medical schools and from venture capital and industry sectors, our Scientific Advisory Board evaluates each application for the importance, quality, and novelty of the project; for the company’s business plan; and for its projected use of MLSC funds that can enable it to secure additional funding. Since the Accelerator Loan Program’s inception, this rigorous review process has yielded a strong group of small companies able to develop their innovative science or engineering and ultimately introduce new patient therapies or diagnostics to market.”
About the Massachusetts Life Sciences Center
The Massachusetts Life Sciences Center (MLSC) is a quasi-public agency of the Commonwealth of Massachusetts tasked with implementing the Massachusetts Life Sciences Act, a 10-year, $1-billion initiative that was signed into law in June of 2008. The MLSC’s mission is to create jobs in the life sciences and support vital scientific research that will improve the human condition. This work includes making financial investments in public and private institutions that are advancing life sciences research, development and commercialization as well as building ties among sectors of the Massachusetts life sciences community. For more information, visit www.masslifesciences.com.
About the Life Sciences Accelerator Loan Program
In order to expand life-sciences-related employment opportunities, promote health-related innovations and stimulate research and development, manufacturing and commercialization in the life sciences, the Life Sciences Accelerator Loan Program provides loans to companies engaged in life sciences research and development, commercialization, and manufacturing in Massachusetts. Target entities are generally early-stage life sciences companies with a high-potential for technology commercialization, rapid growth and downstream private equity financing. The program is designed to help sustain these companies through a critical stage of development and to leverage additional sources of capital to bring cutting-edge innovation to the marketplace.