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Batu Chooses Unusual Path and Unusual Weapon in Cancer Fight

When it comes to small and scrappy biotechs, Batu Biologics might take the cake.

Led by a 25-year-old college dropout, Batu got its start with a $100,000 infusion of cash from a crowdfunding campaign the team launched online. That was back in 2014. In the years since, the company has filed 29 patents, raised over $2 million, and is gearing up to start testing its anti-cancer vaccine in humans.

CEO Samuel Wagner

It’s not the kind of vaccine many of us are familiar with — the kind that acts preventively, like the flu shot or the polio vaccine.

Instead, this vaccine is for patients who have already developed tumors. In short, the company’s experimental vaccine is designed to target and kill blood vessels that feed tumor growth, said Batu CEO Samuel Wagner.

“Everybody has been attacking the tumor directly,” Wagner said. “We’re choosing a different approach. … We’re trying to choke it of this blood supply.”

Lung Cancer First

In human trials, the company has plans to take on late-stage lung cancer patients first. But Batu’s vaccine — called ValloVax — has shown that it may inhibit skin cancer, colon cancer, breast cancer, and some brain cancers in animal trials.

But first, the company must get permission from regulators to test the vaccine in humans. They’ve been working with the U.S. Food and Drug Administration since 2015, sorting through safety and quality manufacturing concerns. Wagner expects to get clearance to enter human trials within a few months now that Batu has partnered with the University of Miami to manufacture the drug.

It’s difficult not to make comparisons between Batu Biologics and biotechs led by more experienced executives. Wagner chose a very unusual route to raise early-stage capital: online crowdfunding, not a method often seen in the biotech world.

To be fair, Batu has an executive team that’s loaded with industry experience, including the company’s co-founder and chief scientific officer Thomas Ichim, a scientist well known for his work in cell engineering. It’s really only Wagner that’s green. Still, it might have been Wagner’s influence that led the company toward some nontraditional financing methods.

Crowdfunding

Although the bulk of the company’s capital came from angel investors, Batu began with crowdfunding and is again launching an online campaign this month to raise $1.2 million. They’ve managed to bring in $508,000 in that campaign so far.

Wagner said the online crowdfunding is strategic. Like all crowdfunding, it’s a marketing ploy at its core. But it’s also about financial timing. The company is worth less while it’s still experimenting with the science, so it’s not wise to seek support from venture capitalists just yet, Wagner said. Once Batu gets the green light from the FDA to test in humans, then suddenly Batu is worth a whole lot more to investors.

“We only need a small amount of money to get through this value threshold,” Wagner said. “It doesn’t make sense for us to seek institutional funding now. We’d rather keep control of the company, fund this ourselves, hit the value threshold with (permission to enter the clinic), and then approach the institutional investors from a position of strength.”

Batu Biologics has three other drug candidates in its research pipeline, all targeting solid tumors. Wagner said the company has plans to team up with immuno-oncology companies, specifically those developing checkpoint inhibitor therapies, targeted T cell therapies or liquid biopsy companies. The idea is that ValloVax might pair well with these therapies as a combination treatment.

ABOUT THE CEO

Samuel Wagner, 25, left the University of California, San Diego — where he studied mechanical engineering — during his senior year to join a peer’s biotech startup called Vaxenta Biotechnologies. Contributing money earned by trading stocks in college, Wagner joined as director of investor relations and eventually became vice president. At Vaxenta, Wagner met his current mentor and founder of Batu Biologics, Thomas Ichim, who was helping the startup as an adviser.

Ichim, the former CEO and chief scientific officer at Medistem Inc. (acquired for $26 million by Intrexon Corp.), appointed Wagner as president and CEO of Batu at age 21, despite his limited experience.

“When I was Sam’s age, nobody believed in me,” Ichim said in a 2014 interview. “So I figured if I had somebody who had a lot of the characteristics that I had at that age, and I provide the right resources and the right environment, then maybe I can develop the Mark Zuckerberg of biotechnology.”

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