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UMich Spinout NanoBio Looks to Develop Vaccine Market Play With New IP in Hand

The US Patent and Trademark Office last month awarded a patent for a needle-free, nanoemulsion vaccine technology developed at the University of Michigan and licensed to UM spinout NanoBio, the company said this week.
NanoBio, which currently plays only in the topical anti-infectives market, will use the patent to try to create a presence in the vaccine market, with an initial focus on influenza, hepatitis, and biodefense, according to company officials.
The nanoemulsion platform technology, which NanoBio calls NanoStat, comprises high-energy, oil-in-water emulsions that are manufactured in sizes of 150 to 400 nanometers and are stabilized by surfactants, according to the company.
These emulsions can rapidly penetrate skin pores, hair shafts, and the nasal mucosa, making them potentially useful as a base for both topical anti-infective products and intranasally delivered mucosal vaccines.
James Baker, director of the Michigan Nanotechnology Institute for Medicine and Biological Sciences, or M-NIMBS, and a professor at the University of Michigan, began developing the technology in the mid-1990s.
In 2000, Baker helped spin out NanoBio from M-NIMBS in order to commercialize the nanoemulsion technology immediately as a topical anti-infective for herpes labialis, commonly known as cold sores, and onychomycosis, also known as nail fungus. Down the road, the company planned to use the technology as a base for a variety of vaccines.
Since it was spun out, the company and Baker’s M-NIMBS lab have secured several rounds of public and private funding to develop applications for the technology, including a $3.2 million contract from the US Department of Defense awarded in 2003 for antimicrobial applications; a $6.3 million Grand Challenges in Global Health Initiative grant awarded in 2005 to M-NIMBS primarily from the Bill and Melinda Gates Foundation; and a $30 million private-equity investment in NanoBio in 2006 by VC management company Perseus.
Baker, who is also chairman of NanoBio, has used a combination of the Gates Foundation funding and the Perseus cash to further develop the nanoemulsion technology for vaccine applications, for which he and the University of Michigan won the recently announced US patent, No. 7,314,624.
NanoBio has secured from UM a worldwide, exclusive license to this and four other patents on which Baker is the primary inventor. Specific terms of the licensing deals are not available, but according to John Coffey, vice president of business development at NanoBio, the agreement for the new IP calls for typical up-front payments and future royalties.
“The University of Michigan has been very supportive in the development of this technology,” Coffey said. “Often times at other tech-transfer offices there is a lot of bureaucracy to deal with.”
Baker said that although he wasn’t familiar with the specific terms of the license, he did think that the company “feels it was a very good and fair deal.”
Coffey also told BTW that the new patent is “very valuable” to the company because it enables the nanoemulsion technology to be used in vaccine preparations for bacterial, fungal, and viral infections.
Both Coffey and Baker said that initial data on the nanoemulsion vaccine have been “very positive,” and the company said that the technology has elicited a dramatic immune response in animals vaccinated against influenza, anthrax, and hepatitis B, among other diseases.

“It’s a unique environment here because we have a top-10 engineering school, medical school, materials science program, chemistry program, and physics program, all on the same campus.”

NanoBio said that in some cases, the immune response is exponentially higher than what is required to provide adequate protection against infection, which leads the company to believe the technology will be able to reduce vaccine antigen quantities to a fraction of that found in current vaccine preparations, thereby allowing for massive quantities of vaccine to be produced cheaply and quickly.
“The vaccine platform is enormous,” Coffey said. “The technology seems to stimulate the immune system significantly, and is applicable to a broad range of products.”
Baker added that “for influenza, the data looks very good. For biodefense applications, we also have very strong data with both anthrax and smallpox that have been published. Those are the areas where we think we can go out immediately and sort of change the equation.”
Coffey also said the topical anti-infective products that NanoBio is developing have revenue potential. “They’re billion-dollar markets, at least definitely the onychomycosis market,” he said. “With the herpes, there is such a small portion of patients currently treating themselves that with a safe product like this, the market is probably going to grow quite a bit.”
The herpes and nail fungus products are in Phase II and Phase I clinical trials, respectively, and the company also has topical anti-infective leads for methicillin-resistant Staphylococcus aureus, genital herpes, and herpes zoster in the discovery or pre-clinical stages. The influenza and hepatitis B vaccines are also in preclinical stages.
Nose for Profit
If NanoBio can penetrate any of these markets, it could mean a huge tech-transfer win for the University of Michigan, which has done well in the past on vaccine technologies. For instance, in July the school sold its stake in future royalties related to FluMist, an intranasal flu vaccine marketed by AstraZeneca, in a deal that could be worth up to $35 million on top of the millions of dollars in royalties UM has already made on the vaccine (see BTW, 7/16/2007).
According to Baker, the University of Michigan occupies a lightly populated niche of several academic disciplines that make it proficient in technology commercialization.
“It’s a unique environment here because we have a top-10 engineering school, medical school, materials-science program, chemistry program, and physics program, all on the same campus,” Baker said. “So it really facilitates the performance of this type of research and allows us to move forward very aggressively in how we translate it.”
He added that M-NIMBS in particular, which focuses broadly on nanotechnology applications in medicine, has had a number of its technologies spun out into companies or licensed to existing firms.
Baker also said that research at UM has a large applied or translational aspect from the early stages. “I think it’s probably less well-known on either coast, but we’ve had marked increases every year in the number of licensing deals and spinouts,” he said. “I think that it’s really encouraged here from the administration and viewed very positively.”
In 2006, UM reported 288 invention disclosures, one more than it did in 2005. However, the 95 licensing agreements it executed in 2006 bested the 86 agreements it reported in the previous year. Also, the university brought in approximately $20.4 million in licensing revenues in ’06 as compared to $16.7 million in ’05. UM spun out nine companies in 2006 compared with seven in 2005.

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