Cleveland Clinic spinout Acellerx has closed a $6.9 million Series A financing round to advance into clinical trials its lead product for cardiovascular disease, including heart attack, the Cleveland Clinic said last week.
The investment brings the total amount of money raised by the company since its inception in 2005 to more than $11 million — almost all of which has come from local or regional private investors or state funding mechanisms.
In addition, Acellerx is helmed by a former employee of Cleveland Clinic Innovations, the tech-transfer arm of the Cleveland Clinic, making the company a true example of a “home-grown” spinout, according to CCI.
Triathlon Medical Ventures, a Midwest venture capital firm with offices in Louisville, Ky.; Cincinnati; Saint Louis; and Indianapolis led the Series A financing with an undisclosed amount.
Other investors included Early Stage Partners, Fletcher Spaght Ventures, Reservoir Venture Partners, Blue Chip Venture Company, JumpStart, and North Coast Angel Fund.
Acellerx will use the cash infusion to initiate clinical trials for Stromal Derived Factor-1, or SDF-1, the company’s lead product. SDF-1 works to repair damaged tissue by recruiting stem cells and improved blood flow to damaged tissue and promoting cell survival.
Originally called Regenrx Medical Systems, the company, which changed its name to Acellerx last year, was founded on discoveries by Marc Penn, director of the Skirball Laboratory for Cardiovascular Cellular Therapeutics and Center for Cardiovascular Cell Therapy at the Cleveland Clinic.
Specifically, Penn discovered naturally occurring proteins called homing factors that recruit stem cells to repair areas of ischemic damage in cardiovascular tissue, the typical result of an acute myocardial infarction. SDF-1 is one of these factors and serves as the basis for Acellerx’s lead biotherapeutic.
“From our standpoint, it’s a real vote of confidence in this team, the technology, and the overall opportunities that are associated with the clinic and the region.”
“What’s exciting about this particular [technology] is that while it is a cellular therapy, it doesn’t involve the administration of cells,” George Emont, a partner with Triathlon Medical Ventures, told BTW this week.
According to an Acellerx investment prospectus, more than 1.2 million people annually are stricken with acute MI in the US. Emont said that the company’s primary market target is treating ischemic tissue that results from a heart attack. Acellerx has estimated that such a market may be worth up to $9 billion.
Few treatments for MI-induced cardiac ischemia exist beyond reopening the occluded artery responsible for the heart attack, although many companies or academic labs are attempting to administer cell-based therapies to treat MI.
The main problem with cell-based approaches, however, is that they are inefficient because molecular signals responsible for directing the stem cells to the damaged heart are expressed for only a few days. Acellerx hopes to increase the efficacy of such treatments by co-administering SDF-1.
“SDF-1 can be used to basically … home stem cells to where the SDF-1 is,” Emont said. “By injecting SDF-1 into areas such as ischemic tissue that might result from a heart attack, the hope is that we will be able to attract stem cells for a longer period of time than our body would normally allow so that the tissue will be repaired.”
Acellerx has already produced what Emont said is a “significant amount of pre-clinical data” from animal studies supporting SDF-1’s mode of action, and has held a pre-investigational new drug meeting with the US Food and Drug Administration. Both of these factors contributed heavily to Triathlon’s decision to invest in the company, Emont said.
He also said that other ischemic markets may be possible in the future, and that Acellerx is looking at additional unrelated applications, such as treating wounds that may precipitate ischemia in tissues or organs.
“There are a number of different applications for this, and we’re excited about the opportunity,” Emont said.
Acellerx has licensed nearly 30 patents from the Cleveland Clinic related to Penn’s discoveries, according to a company investment prospectus. Terms of the company’s licensing arrangements with Cleveland Clinic have not been disclosed.
Of the seven disclosed investors in Acellerx’s Series A financing, all but Fletcher Spaght maintain a strong local or regional presence in the Cleveland area or in surrounding cities or states.
Last year, Acellerx also nabbed $1.5 million in seed funding, including $700,000 from Cleveland’s North Coast Angel Fund; $500,000 from Cleveland-based venture development organization JumpStart; and the rest from Cincinnati-based Blue Chip and Xgen, a Cleveland-based investment partnership.
Furthermore, the company’s development was originally supported by approximately $2.8 million in research funding awarded to the Cleveland Clinic through Ohio’s Third Frontier program, a 10-year, $1.6 billion economic-development initiative launched in 2002 to expand Ohio's high-tech research capabilities and promote innovation and company formation.
Earlier this year, Acellerx received approximately $1 million from the Global Cardiovascular Innovation Center, a $250 million product-commercialization consortium also supported through a $60 million grant from the Third Frontier Project.
So far, Acellerx has been a prime example of the overarching goals of the Third Frontier program, and is “in every sense of the word ‘home grown,’” Christopher Coburn, executive director of Cleveland Clinic Innovations, said in a statement.
“The state of Ohio government should take some pride in the growth of this company,” Coburn said. “Getting a deal done for a therapeutic company in this overall economic turmoil [is] truly remarkable. From our standpoint, it’s a real vote of confidence in this team, the technology, and the overall opportunities that are associated with the clinic and the region.”
Further adding to Acellerx’s Cleveland roots is the fact that Rahul Aras, former director of life science commercialization at Cleveland Clinic Innovations, left the school to serve as Acellerx’s CEO when the company spun out — an unusual, but not unprecedented move.
“I can’t say that it’s typical,” Triathlon’s Emont said. “Arul is a very talented person, and has done a very good job of bringing the company to where it is today. And the investors have confidence in him at least through this round of financing, and possibly beyond. We’ve been very impressed with the work he has done.”
Scientific founder Penn will continue to advise Acellerx, though he will retain his faculty position with the Cleveland Clinic. It is unclear whether the company will sponsor ongoing relevant research in Penn’s lab. However, Emont said that Penn will “obviously [be] very involved with the progression of the science as it moves toward the clinic.”
Emont also said that Acellerx is currently housed in an “incubator-type” facility affiliated with the Cleveland Clinic, though he didn’t elaborate.