By GREGORY ZELLER //
A critical seed investment will help Traverse Biosciences commercialize pharmaceutical candidates licensed from the SUNY Research Foundation.
The circa-2013 Stony Brook-based biotech has secured $500,000 in convertible debt financing in a round led by Excell Partners, a Rochester-based venture capital fund partial to early-stage, high-tech startups.
The SUNY Research Foundation added an undisclosed investment to Excell Partner’s $100,000 stake, while a collection of 10 accredited angel investors – “almost exclusively from the Long Island region,” according to Traverse Biosciences founder and CEO Joseph Scaduto – brought the total to $500,000.
The capital infusion will accelerate development of TBR-N0224, Traverse Biosciences’ leading drug candidate, and “allow us to expand the company’s product-development pipeline,” according to Scaduto.
“It’s definitely essential to the process,” the CEO told Innovate LI. “This allows the company to continue daily operations while supporting management and our product-development efforts.
“We deeply appreciate the commitment and shared vision of the individual accredited investors that have chosen to participate in this round,” Scaduto added.
The funding will support Traverse Biosciences’ continuing efforts to commercialize its proprietary library of chemically modified curcumins for the treatment of chronic inflammatory conditions and cancers affecting humans and animals.
In May 2015, Traverse Biosciences announced an R&D agreement with Kansas-based Aratana Therapeutics, as well as an exclusive sublicensing option that could make Traverse eligible for up to $8.25 million in up-front and milestone payments and additional royalties on TRB-N0224 sales.
First, Aratana Therapeutics needs to be convinced. To that end, the cooperative R&D deal included proof-of-concept evaluations that have now been completed, according to Scaduto, and Aratana officials are now conducting a three-month due-diligence process.
Traverse Biosciences is slated to make a final presentation to Aratana’s management team in July. Helping Scaduto prepare that presentation will be Excell Partners CEO Theresa Mazzullo, who has joined Traverse Biosciences as a “board observer.”
“Our investment team was very impressed with the progress Traverse Biosciences has made towards achieving its stated strategic goals,” Mazzullo said in a statement, noting the VC fund was especially emboldened by the R&D deal with Aratana Therapeutics, which is exploring TRB-N0224 as a primary treatment for periodontal disease in pets.
“We fully anticipate that Traverse Biosciences will continue to aggressively pursue technical and regulatory milestones that add commercial value to its product portfolio,” Mazzullo added.
The Excell Partners CEO joins existing “board observers” including Stony Brook University technology transfer czar Peter Donnelly and representatives of original Traverse Biosciences investors Jove Equity Partners and Topspin Partners.
With an A-list of observers locked up, it might be time to create an actual Traverse Biosciences Board of Directors, noted Scaduto, who is currently the only board member.
“[The observers] clearly have input and influence, but they are non-voting members of the board,” Scaduto noted. “They are there to provide advice and guidance. Now that we’ve received financing and we’re growing as a company, it may be time to build out a more formal board of directors.”
While he’s already identified “a couple of candidates, Scaduto wouldn’t name names, referencing only “industry veterans” with experience in pharmaceuticals, biotech and animal health.
Whoever lands on the Traverse Biosciences board will likely have more capital to manage. While “we are very grateful to Excell Partners for leading this financing,” Scaduto said his startup is still on the hunt for fresh investments – including a pending
Phase II Small Business Technology Transfer grant that’s been “positively reviewed” by the National Institutes of Health.
Traverse Biosciences applied for the Phase II grant in January and is “cautiously optimistic” about its fate, which should be decided soon, Scaduto said.