CASE STUDY

PULMOTECT: When researchers at M.D. Anderson triggered a unique, pathogen-killing phenomenon in the lungs, they knew they were onto something with commercial potential. But Dr. Burton Dickey, co-founder and Chair of the Department of Pulmonary Medicine, hadn’t created a company before and viewed the challenges of commercial early-stage drug development to be significant. He and Magnus Hook, co-founder and the Regents and Distinguished Professor Biochemistry and Biophysics at Texas A&M and Director of A&M’s Center for Infectious and Inflammatory Diseases, began looking for alternatives.

Enter Fannin. In 2008, Fannin agreed to help manage the company — Pulmotect, Inc. — setting out concrete milestones for its development program, researching market opportunities and formulating intellectual property strategy. As part of the relationship, Fannin hired Dr. Brenton Scott, a post-doc in Dr. Dickey’s lab who had already started the company formation and licensing process, to work for Fannin, where he could take a lead role in shepherding the development of the technology. The first order of business became identifying a protectable chemical compound that could stimulate the toll-like receptors (TLRs) in the lungs’ epithelial cells in the same way that the earlier bacterial lysates had in the lab. To fund this work, Fannin supplied initial seed funding, which was used for third-party costs and for the pursuit of non-dilutive grants to fund the research.

The technological promise was compelling, and Pulmotect was awarded a $1 million Texas Emerging Technology Fund (TETF) grant in 2009, with Fannin managing the TETF pursuit process. These funds, along with Company’s first “angel” equity round, enabled the company to identify its leading drug candidate — PUL-042 — a combination of two specific TLR ligands, the lipopeptide Pam2CSK4 and a Class C oligodeoxynucleotide. Further pre-clinical work was needed and was supported by $1.7 million in Phase I and II SBIR grants in 2010-2011. Strong pre-clinical data combined with an efficient product development program and the ability of PUL-042 to protect immunocompromised chemotherapy patients merited a $7.1 million commercialization award from the Cancer Prevention and Research Institute of Texas (CPRIT), with the Company fortunately closing on its funding commitment from CPRIT in late 2012.

Pulmotect completed the Phase I trial of PUL-042 in mid-2014, to be followed by a Phase1a repeat-dose study in 2015. Work has commenced on the design of its Phase II trial. Headquartered in the Fannin Innovation Studio, the Company continues its “lean” approach, operating with three full-time employees, a tight core group of outside specialty consultants, and an active Board of Directors led by Fannin. While focusing on the prophylactic use of PUL-042 in immunocompromised cancer patients as its “go to market” strategy, Pulmotect also is exploring the potential applications of PUL-042 in preventing asthma attacks, which are in many cases triggered by viral pathogens in the lungs. The Company recently received over $1 million in SBIR grants to pursue this approach.

The Fannin-Pulmotect partnership produced a significant drug candidate less than four years from the discovery of the lead molecule, with more than $15 million of non-dilutive and lightly dilutive funding leveraging just a little over $1 million of equity risk capital. The Company has funding and is poised to support a Phase 2 trial.