Vaccine Upstart Inviragen Aims to Capture Dengue Market

Six-year-old Inviragen may be the biotech of the future.

Focused on developing vaccines for neglected diseases in emerging markets, Inviragen has built an unusually flexible business model. It is one of the few vaccine start-ups with a completely virtual R&D staff, and also operations on three continents and collaborations around the world. Moreover, it is targeting products for the rising middle class, as well as for the vast impoverished population. And, counter to the example of some other emerging markets start-ups, it relies on a mix of public and private financing.

While other companies share some or even all of these characteristics, Inviragen claims to be the only one focused on the vaccine space in emerging markets. And unlike vaccine specialists Crucell, Intercell, and Emergent Biosystems, which have grown organically into mid-size companies, Inviragen, in the words of its CEO Dan Stinchcomb, “has taken a virtual model and tried, with a smaller team, to add value and translate projects from the bench to the clinic.”

The company is headquartered in Fort Collins, Col., with extensive operations in Singapore and collaborative arrangements with academic partners throughout the U.S. and in South America.

Inviragen is in Phase I with a tetravalent Dengue vaccine called DenVax which it licensed from the CDC, and will soon enter Phase I with a Hand, Foot & Mouth vaccine (Also see "Asia Innovators: Singapore's Inviragen In Race With Sinovac For HFMD Vaccine" - Scrip, 19 Jul, 2011.). Projects farther back in the pipeline address Japanese Encephalitis, West Nile Virus, Chickungunya, HPV, Avian Influenza, and the Plague/Smallpox. Its vaccine pipeline is a mix of in-licensed products, internally developed vaccines, and vaccines acquired as a result of the SingVax merger.

In 2009, Inviragen merged with SingVax Pte, a vaccine specialist based in Singapore; the two companies combined their vaccine pipelines and went forward under the name Inviragen. Concurrent with the merger, Inviragen raised $15 million in a series A round backed by a syndicate of four investors and has raised an additional $14 million in grants from public sources including foundations and governments.

Inviragen is fortunate in being the beneficiary of two big trends playing out in industry: the rush to gain a foothold in emerging markets in Asia, and a growing appetite among big pharma for vaccines (“The Vaccine Market Grows Up: They're Not Just for Kids Anymore” “IN VIVO” July 2009).

A Virtual Staff And A Bimodal Approach to Funding and Partnering

The geographic breadth of Inviragen’s network is extraordinary. The far flung corporate management consists of Stinchcomb, Joseph Santangelo, chief operating officer, and Jorge Osorio, co-founder and chief scientific officer. Osorio, a Columbian native, is based in Wisconsin but makes frequent trips to Columbia where he runs the Phase I DENVax trial at Universidad de Antioquia. Santangelo is based in Singapore where he runs the HFMD Phase I trial at the Duke-National University of Singapore.

The company collaborates with U.S. universities (Universities of Wisconsin at Madison, Texas, and Colorado) and government agencies for preclinical work, and with Duke-National University of Singapore, National Institutes of Health, and universities in Columbia for clinical trials. Inviragen also has a manufacturing collaboration for DENVax with Shantha Biotechnics Ltd (Hyderabad, India), acquired by Sanofi in 2009.

Inviragen’s virtual staff model enables it to contain costs – a key competitive advantage for a start-up entering the clinic. Stinchcomb maintains that the virtual model, although born of necessity, is one that works “particularly when you’re working on medical needs outside the United States. It has lowered some of our costs because we can leverage resources – we don’t have to build a lot of infrastructure in terms of animal housing and the like.”

Nonetheless, there are considerable challenges to running a virtual R&D operation on 3 continents, not least the need to recruit, coordinate, direct and monitor researchers, and to guarantee supply chain efficiency and clinical trial compliance in Asia and South America.

Inviragen also is agnostic as to its sources of funding. It seeks grants from U.S. government agencies, overseas health ministries, and disease foundations, but also has venture investor supporters.

This is not necessarily the rule in the world of neglected diseases where some companies, out of a sense of public health ardour, reject private funding altogether in favour of public grants, donations of lab and other equipment, and whatever they can earn through products or services.

Stinchcomb says that Inviragen advanced its DENVax vaccine from 2006-2009 through preclinical testing and early-stage manufacturing by means of grants, contracts, and a little bit of angel funding. “But that can only take you so far. The other side of the coin is that while it’s attractive from a funding perspective, and of course non-dilutive, it’s difficult to get the funds sufficient to complete the really expensive stages – manufacturing and clinical trials,” he says. “The NIH isn’t really set up to fund those operations. That’s when we realized that we needed to have some venture backing as well, and we were lucky enough to find supportive investors – two in the U.S., and two in Singapore – to provide us with our series A financing.”

That bimodal approach to funding continues through all of Inviragen’s operations. Its partners for research, manufacturing, or clinical trials are a mix of government agencies and foundations like the Bill and Melinda Gates Foundation, the Dengue Vaccine Initiative, and the Global Alliance for Vaccines and Immunization, as well as contract arrangements with universities and commercial entities.

Moreover, the diversity of its active collaborators and partners brings other benefits particularly suited to Inviragen’s business model. Basically, the company has positioned itself to face two pools of opportunity, east and west. For instance, wherever they have operations, Stinchcomb and his colleagues are able to keep an eye out for licensing or research collaboration opportunities. “That is frankly one of the advantages to our office in Singapore” he says. “There is some very good work being done there. Also, it gives us much easier access from a business development perspective to the rest of Asia, to researchers in Taiwan and India and China, and so forth.”

First Up: Dengue Fever

Dengue fever occurs in almost all areas where the Aedes aegypti mosquitoes live - tropical and subtropical urban areas of the world including Mexico, South America, the Caribbean, Southeast Asia, the Indian subcontinent, and Africa. It is caused by one of four related, but distinct, virus serotypes (DEN 1-4), which are transmitted to humans by the Aedes aegypti. Infected humans are the main carriers and multipliers of the virus, and in turn serve as a viral source for uninfected mosquitoes. It is a painful and sometimes fatal disease with symptoms including headache, rash, muscle and joint pain. In some cases it can lead to circulatory failure, shock, coma, and death.

Inviragen’s dengue vaccine is tetravalent, meaning it generates a neutralizing immune response to all four viral serotypes on vaccination.

According to Stinchcomb “there is a whole spectrum of disease with dengue. You can actually get the virus and not show any clinical symptoms, or you can have what’s called dengue fever, where you have the severe fever and rash and a lot of bone pain and arthritis. It is very debilitating, very painful. The most severe form is called dengue hemorrhagic fever, and in that case your body over reacts to the virus and, essentially, your vasculature, your blood vessels become damaged and you leak blood.

The Dengue Market: Dynamics, Strategy, And Access

There are currently no treatments, drug or vaccine, available for dengue. Inviragen’s dengue vaccine, DENVax, is in Phase I trials in Columbia. Stinchcomb says their financing will carry it through Phase II, at which time he’ll seek a partner, preferably a big pharma with the ability to manufacture it on a global scale and to fund Phase III and commercialize it.

The World Health Organization estimates that 2.5 billion people – two fifths of the world's population – “are at risk from dengue.” That is the addressable population for a dengue vaccine. Inviragen puts global annual incidence at 100 million, Sanofi (on their website) at 220 million. As with many neglected diseases, particularly ones affecting tropical areas in undeveloped regions, accurate numbers are hard to come by.

Travelers – particularly tourists and business travelers – are a significant and fast-growing part of the dengue population. In fact, the four serotypes spread worldwide because of human travel. “Humans help spread this disease because it’s transmitted from human to mosquito to human. If someone infected by DEN1 gets on an airplane and goes to Columbia where he is bit by Aedes aegypti mosquito, that mosquito is now infected for life. Everybody else it bites will potentially get the virus.” The CDC noted in a recent study of 17,353 ill travelers that dengue was the “leading cause of systemic, febrile illness” among travelers returning from dengue-endemic areas in the tropics.

Duane Gubler, an advisor to Inviragen, and Director of the Program on Emerging Infectious Diseases at the Duke-National University of Singapore, says that the dengue vaccine market will be determined by cost and by duration of immunity. Sanofi has a dengue vaccine in Phase III based on a yellow fever flavivirus backbone into which they’ve cloned different dengue viruses. “The merit of the yellow fever backbone is the fact that it has been into probably 500 million people” says Gubler “It’s a vaccine that ideally will provide ten years of protection from dengue. So, it’s safe, it’s cheap, and it’s immunogenic,”

Inviragen’s vaccine, by contrast, is based on a dengue fever backbone.” We think we may be able to get longer lasting and faster immune responses, in part because we have a similarity in the backbone,” says Stinchcomb. “This allows cross-reacting cellular immune responses to dengue. You won’t have that with the yellow fever backbone. So there are immunological reasons why we think we might be able to develop these neutralizing antibody responses to all four serotypes faster, and that could be a big commercial advantage.”

Perhaps a greater advantage, according to Gubler, lies in the comparative dosing regimens for the two vaccines.

Stinchcomb points out that Sanofi’s vaccine requires three doses over a long period of time. Inviragen’s vaccine – this is the hope – will require one or two doses over a shorter period of time. According to Gubler, Sanofi’s three-dose vaccine “limits its efficacy as a public health vaccine. It needs to go into probably 100 million children very quickly, and given over a year it’s going to become very expensive. All of these vaccines will require subsidies, but if you’ve got a three-dose vaccine, it’s just going to add excess cost and make some of the international funding agencies reluctant. Now, Sanofi is constructing a facility that will produce 100 million doses per year, so that means about 30 million people per year will get the vaccine. That may be adequate, I don’t know.” Another issue is whether those children will be protected over that year until they get to their third dose. If Inviragen can get a one- or even a two-dose vaccine to market that provides fairly long immunity, it will have a shot at capturing the market.

Commercializing a vaccine in countries with varying levels of political will and medical infrastructure makes market access a daunting challenge. First there’s the political landscape: working with groups like the DVI (funded by the Gates Foundation) to build the business case for regional ministries of health, providing them with disease incidence, with the health and economic cost to their population and their infrastructure; demonstrating the cost-efficacy of instituting the vaccine.

Second, there’s the practical infrastructure challenge: health care infrastructures vary widely within these regions. Access to health care differs depending on economic status and location, whether rural or urban. And the ability to deliver health care depends on whether the country is wealthy and well organized or impoverished and poorly developed. Here, too, companies must rely on public health foundations like GAVI to nurture those infrastructures.

Third, there are technical issues like supply chain and vaccine delivery: “During the development of our dengue vaccine,” says Stinchcomb, “we’ve been looking at things like the thermal stability of the vaccine, or whether we can develop a better liquid formulation. We’re also interested in needle-free delivery options because in some of these lower-income countries there are issues with needle re-use and misuse.”

Here, again, the company takes a bimodal approach to commercialization. Stinchcomb says that his dengue vaccine, indeed all the vaccines in his portfolio, target the rising middle class, particularly in Asia, and that the vaccine will be sold directly to physicians and clinicians that serve the middle and upper classes. “That will provide our higher margin opportunity.” But he also envisions working with GAVI, UNICEF, or the Pan American Health Organization in the Americas to get vaccines to the more numerous poor in these countries. “Our goal is commercial success and public health.”

The Biotech Company Of The Future?

Six years ago when Inviragen started, only three of the top ten pharma companies had a vaccine division. Now, eight do. Big Pharma woke up to the opportunity to sell their existing vaccines into emerging markets for diseases like influenza, measles, smallpox, etc. However, they also recognized a parallel opportunity to develop vaccines to satisfy unmet medical needs unique to specific countries. Inviragen is not alone in pursuing neglected diseases in emerging countries. But they are banking on the quality of their science, on the extent of their operations and relationships, and on a big pharma partner to help them pull ahead of their better-resourced competition.

Sanofi will likely launch its dengue vaccine in 2014; Inviragen’s would follow two-to-three years after. Other competitors include NIH (their Phase I vaccine is based on a DEN4 backbone); Hawaii Biotech which was purchased in bankruptcy by Merck in 2010 (Also see "Deals Of The Week: Actelion/Trophos, Merck/Hawaii Biotech, Cypress/Ramius" - Pink Sheet, 26 Jul, 2010.); and the U.S. Navy, which is looking for a partner to help develop its vaccine (see table).

Stinchcomb doesn’t seem concerned. He likes where he sits: a promising vaccine in the clinic and another about to enter; a deep portfolio of vaccines for other neglected diseases with similar biology and demographics; and a foot firmly planted in each hemisphere.

By Michael Goodman