[Corrected, 6/28/19. See below.] There’s a reason why mothers are instructed to breastfeed their babies soon after they’re born. The milk they produce in the days after giving birth is rich in nutrients, immune cells, and antibodies. While this “first milk,” also known as colostrum, is crucial in getting newborns off to a healthy start, PanTheryx CEO Mark Braman says the fluid’s components can also help resolve gastrointestinal disorders rooted in the gut microbiome. Now, the company has $50 million in new capital to ramp up its research.
The fresh cash comes from Perceptive Advisors, a firm that invests in life science companies. Boulder, CO-based PanTheryx has already commercialized a product developed to relieve diarrhea in children and adults. Braman says his company’s approach can also apply to clostridium difficile infection, a type of gut infection. Other GI diseases that the company is researching include two types of inflammatory bowel disease: Crohn’s disease and ulcerative colitis.
The PanTheryx expansion plans come as a growing number of biotech startups take aim at the gut microbiome, with some of them encountering setbacks. Much about the microbiome and its role in disease remains a mystery, but Braman, a former Pfizer (NYSE: PFE) executive, contends that nourishing gut bacteria is an untapped solution.
“The gut influences so many different diseases,” Braman says. “It only stands to reason that nutrition will play an important role in that.”
Founded in 2007, Braman says PanTheryx’s initial focus was acute infectious diarrhea, a type of diarrhea typically caused by viruses. The disease is common, and it kills an estimated 1.5 million to 2.5 million children worldwide each year. Studying the data, PanTheryx found that incidence of diarrhea was quite low in babies, particularly in the first six months of life. That research led the company’s scientists to colostrum. Obtaining colostrum from new mothers isn’t practical, so PanTheryx turned to bovine colostrum, the first milk produced by dairy cows.
PanTheryx’s anti-diarrhea product, called DiaResQ, is a powder meant to be mixed with water and then swallowed. In addition to colostrum, the product contain antibodies from chicken eggs. Braman says this combination addresses viral, bacterial, and parasitic causes of infectious diarrhea. The product was developed to pass through the stomach and into the small intestine where it binds to pathogens and flushes them out, Braman says. The components of the product also reduces inflammation and promotes repair of tissue in the gut.
Data from a clinical trial enrolling 325 children were mixed, however. According to results published last year in BMJ Global Health, the PanTheryx product was no better than a placebo at reducing the duration of diarrhea, the main goal of the study. But the stool of children who were given the PanTheryx product showed a “significant reduction” in pathogens that cause diarrhea. PanTheryx went ahead and launched DiaResQ last year, and the product is now available over-the-counter online and through retailers such as Walmart (NYSE: WMT), CVS Health (NYSE: CVS), and Walgreens.
Beating a placebo in a clinical trial is essential to support FDA approval of a drug. But the PanTheryx diarrhea product isn’t a drug. It’s a “food for special dietary use.” Products in this category address a particular dietary need and don’t require a prescription or a physician’s supervision. The slightly narrower “medical foods” category encompasses products intended for dietary management of a specific disease. Medical foods are intended to be taken under medical supervision.
Foods for special dietary use and medical foods face limitations on the claims that they can make, and those restrictions have gotten PanTheryx into hot water. In 2017, the FDA sent a warning letter to PanTheryx subsidiary APS Biogroup saying that therapeutic claims on labels characterized the products as drugs, which they were not. Braman says the products belonged to a PanTheryx customer. In addition to its own colostrum production, PanTheryx is also a contract manufacturer for companies that incorporate the fluid in products such as baby formula. He says the labeling language was changed to address FDA concerns. [Paragraph corrected to state that APS received one, not two, warning letters.]
Bovine colostrum is the backbone of PanTheryx’s product pipeline. The colostrum comes from 1.4 million cows at 1,000 US dairy farms, which freeze the first milk on site, Braman says. PanTheryx picks up the colostrum and trucks it to facilities in Phoenix and Ripon, CA, that PanTheryx acquired in 2017 to bolster its production capabilities. In addition to securing colostrum supply, Braman says his company also has patents on its production process, which involves pasteurizing the colostrum and drying it. But PanTheryx does not bioengineer the antibodies or proteins in the colostrum. Braman says the antibodies that end up in the product depend on the vaccines given to the animals.
“The cow and hen are the bioprocessor,” Braman says. “They’re very efficient at delivering antibodies and growth factors into the final product.”
As PanTheryx expands its research to specific GI disorders, it will need to produce more robust data that stands up to greater scrutiny. To date, PanTheryx’s research in c. diff infection and inflammatory bowel disease is preclinical. The company is also studying applications of its technology in addressing drug induced injuries, such as the gut damage caused by chemotherapy. Braman says clinical trials testing PanTheryx candidates in these applications could start by the end of this year.
Not all of the PanTheryx product candidates will be biologic drugs. Some might be medical foods, which offer a faster path to market because the FDA does not require them to go through the three phases of clinical trials required of drugs. That’s the pathway chosen by Whole Biome, a San Francisco company that plans to launch a type 2 diabetes medical food next year. Braman says that if all goes well, PanTheryx’s medical foods could reach the market in two years. The company’s biologic drugs could follow two to three years after that.
Earlier investors in PanTheryx include private equity firm Pegasus Capital Advisors. PanTheryx says it has raised $170 million total. The new $50 million in capital will be split between commercialization of DiaResQ and research and development of new product candidates. Depending on the progress of the research, Braman says those candidates could be developed in partnership with pharmaceutical companies or with large food or nutrition companies.
“We know the kinds of resources they can [bring to] bear, we don’t have to develop this all ourselves,” says Braman, a former vice president in Pfizer’s nutrition group. “We do believe it’s important to at least get the preclinical and Phase 1 work so you have sufficient data that would interest big players.”