By GREGORY ZELLER // Last year, when local venture firm Topspin chipped in on a $100,000 infusion for Stony Brook-based biotech Codagenix, it gave the startup a fairly clear idea of what to do with the money.
“We had suggested to them that they needed to tighten up some aspects of their clinical data, and in fact they used the money to do just that,” said Steve Winick, Topspin’s managing director. “The tests came out very well – exactly the kind of progress we hoped for.”
That progress was rewarded last week with a $2 million Topspin investment announced by Codagenix founders Steffen Mueller and J. Robert Coleman.
Without the $100,000 boost – an Accelerate Long Island grant matched by a Topspin and Jove Equity Partners investment – Codagenix “might have gone to the angels and looked for intermediate investments,” Winick noted. “But instead, they went straight from Accelerate to VC.”
Codagenix uses a proprietary software platform to digitally recreate viruses and redesign their genomes; the “re-coded” viruses are then synthesized from scratch and have proven to be highly effective vaccine candidates. Now, the $2 million will allow Codagenix to expand its software platform to target new viruses.
It will also help the biotech firm begin human trials of its ultra-low-dose live-attenuated influenza vaccine, cementing Topspin on the ground floor of a groundbreaking vaccination science with almost incalculable potential.
“Since they did such a good job tightening up their intellectual property portfolio, we thought it was the right time to move to the next level,” Winick noted. “We thought we should put our foot on the accelerator and do some real clinical tests.”
The Topspin infusion more than doubles Codagenix’s fundraising to this point. The startup had plowed through concept, design and laboratory testing on roughly $1.9 million in National Institutes of Health grants and that Accelerate seed funding. Earlier this month, Codagenix announced it was sharing a $100,000 grant from the U.S. Department of Agriculture with the Plum Island Animal Disease Center to develop a vaccine for the infectious Foot and Mouth Disease Virus.
Now, as per Topspin’s master plan and Codagenix’s own strategy, human testing of the company’s influenza vaccine – to prove the vaccine’s safety and efficacy – can begin, along with a concerted effort to expand the company’s software platform to other potential vaccines.
“The vaccine market is growing and there are clearly unmet clinical needs for vaccines that work,” Coleman said in announcing the Topspin stake. “We envision our software-based approach to … provide a rational approach to designing vaccines against multiple targets.”
While the $2 million investment is relatively small, it’s big news for Long Island bioscience, marking the first time an Accelerate graduate landed Series A funding from a VC firm.
While Topspin is thrilled with Codagenix’s progress so far, whether or not the Roslyn investors can repeat that winning formula – a joint seed investment leading to a larger solo investment leading to a potentially enormous returns – remains to be seen.
The Topspin-Jove Equity fund has only “a few more” matching $50,000 investments to make before Accelerate’s original funding phase is completed, according to Winick, and “the future is not set yet.”
So Topspin will have to continue to seek out new early-stage investment opportunities, including a possible future round with Codagenix.
“I’m sure they’ll need more money,” Winick noted. “There are a lot of ways to fund trials. It could be grant money, it could come from other partners, it might come from us. We certainly expect to participate as the company moves along, based on what we know now.”
“They have some really unique science,” Winick added. “In all of our investments, we look for things with the potential to make a high impact in their respective fields.
“This science has that potential.”