Novo Biosciences, a seven-year-old biotech startup that is working on developing a drug that could provide humans with regenerative properties, has raised $4 million as it pursues clinical trials in humans.
The financing was revealed in paperwork filed in June with the U.S. Securities and Exchange Commission and confirmed by CEO Kevin Strange.
The company, based in Ellsworth, is a for-profit spinoff of MDI Biological Laboratory, of which Strange was previously president. While at the laboratory, Strange and two researchers, Viravuth Yin and Michael Zasloff, identified a certain molecule called MSI-1436 that has demonstrated regenerative properties in the laboratory, first in zebrafish and then in mice. It has also begun studying the molecule’s efficacy in pigs “with early encouraging results,” Strange said. The group’s findings were published in the journal Nature in 2017.
(For a more in-depth discussion of Novo Biosciences, see MSI’s Founder Forum interview with Kevin Strange from 2017.)
“It was the strength of our animal data and our company that attracted this investment,” Strange said.
The company’s next goal is to show that this molecule—it’s not really a “drug” until it’s approved by the U.S. Food and Drug Administration—can help humans regenerate heart muscle tissue damaged as a result of heart disease or other diseases that cause damage to heart tissue.
The $4 million investment will help the company prepare its Investigational New Drug application for the FDA, which is a first step toward the company’s ability to begin testing the molecule in humans, Strange said.
Novo Biosciences is now based at the Union River Center for Innovation in Ellsworth. Strange and his co-founder, Viravuth Yin, are the sole full-time employees.
A FIVE-YEAR SEARCH FOR CAPITAL
The search for “smart” capital was a long one. Strange said he’s been looking for investors for the past five years and spent the last 18 months exclusively working on fundraising. During that time he made “dozens and dozens” of pitches to various investors, but investing in drug development is notoriously risky.
Developing and getting FDA approval for new drug therapies is an incredibly expensive endeavor, Strange said. He expects Novo Biosciences will ultimately need 10 times the amount of money it raised in this seed round to see it through the entire process, which will take years.
But once Strange met this relatively new investment group, which he said is focused exclusively on investing in companies developing new drugs, he said the financing deal came together rather quickly.
He said the group brings much more than money to the table.
“Not only have these folks invested money in us, but more importantly frankly, they’ve invested their talent,” Strange said. “I will tell you that with money alone we wouldn’t be moving the ball as fast we are.”
In 2017, Maine Startups Insider published an extensive interview with Strange in which he discussed the challenges he faced in finding investors. In Maine, he faced investors who lacked the necessary understanding of how drug development works and that it’s a notoriously risky endeavor that takes tens of millions of dollars. Outside Maine, he faced investors who doubted the company because it was based in Downeast Maine rather in a biotech hub like Boston.
“When you tell me you’re not going to invest in me because I’m in Maine, yeah, it’s disheartening. But screw you. We’re going to keep going,” Strange told MSI at the time.
This is the first large infusion of outside equity capital the company has received and comes as a result of nearly five years of effort, according to Strange. To this point, the company has raised approximately $2.5 million in non-dilutive funding through SBIR and NIH grants.
MOLECULE COULD ALSO HELP COVID PATIENTS IN RECOVERY
Besides helping survivors of heart attacks, Strange also believes the drug candidate could help COVID patients in recovery because it should be able to help repair tissue damage caused by the hyper inflammatory state, known as “cytokine storm,” that some COVID patients experience in response to the virus.
“That’s the hypothesis,” Strange said. “And that’s all hypothesis now; we haven’t tested it, but it makes a lot of sense.”
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Thank you.
Larry Best
I am so excited to hear about Novo Biosciences and the TRODUSQUEMINE drug. I understand the University of Aberdeen were involved in research involving CYCLODEXTRIN which is similar in many ways to Trodusquemine. I am from the UK initially and presently live in Canada. As an individual having had a massive heart attack at age 55, a quad bypass at age 61 and another massive heart attack a couple of years ago i follow your research with great interest. If you are looking for “guinea pigs” , my hand is in the air !! As a British citizen i’ll look forward to cleaning my arteries out and having my arterial wall less rigid.
Keep up the good work chaps and thank you for it.
John Frame I’m offering myself up as well. I’ve been following this company for a few years and I’m excited that we’re finally getting closer to the goal of reversing our heart issues.