A group of China-based investors is backing Bioatla LLC's bid to address growing demand for new immunotherapies in the country with a $30 million equity buy-in. Bioatla President, CEO and Chairman Jay Short called it a "transformative event" that will help the company leverage expertise at its established Beijing lab to build new strategic partnerships with Chinese biophama companies in pursuit of further developing its conditionally active biologic (CAB) antibody platform and other technologies.

The funding is a key component of the company's larger plan to aggressively develop therapeutics for the China market, tapping into the enormous "momentum" that's being generated as both the government and investors begin to focus on domestic biopharma innovation and safety, Short told BioWorld Today. "Fundamentally, if you really want to move into the Chinese market, it's really better to bring therapeutics in [that are] viewed as Chinese therapeutics.

"China's looking for leading technologies and innovation now," he said. This investment, from a varied group of private investors that Bioatla expects to reveal with its new partnerships over time, will help it establish contacts and relationships in the vast market that Short said he expects will to lead to additional near-term, nondilutive research and development investments. All of the new equity investors are converting into this new transaction from a convertible note financing of about $6 million the company executed early last summer, Short said.

With CABs, Short said, Bioatla can create antibodies that are modulated by tumor micro-environments, potentially allowing the company and its partners to increase the safety of drugs by reducing toxicity of antibody-based therapeutics, chimeric antigen receptor T-cell (CAR-T) therapies and other immune-cell based therapies, creating antibodies that feature a reversible mechanism active only in the right biological contexts. The technology also has "the opportunity to reactivate a whole host of new targets, some of which we've known for a couple decades," Short said, since proteins on tumor cells are also found on normal healthy cells.

The company, which employs about 40 people altogether and is currently hiring, is looking to move its first CAB-based therapies into the clinic by the latter part of 2016.

The company was founded in 2007 by Short and his wife, IP specialist Carolyn Anderson, following a break from company-building for Short, who once led high-flying Diversa Corp. They were compelled by the idea of starting a company they could both fund, lead and advance with a bona-fide China strategy. The couple seeded the company alongside minority investment from the private equity firm Biotech Investment Group, getting it off the ground by building technologies for protein therapeutics, with a heavy focus on antibodies. But from the very start, the San Diego-based company operated a lab in Beijing, providing services to other companies to self-fund its own research, development and, ultimately, a broad patent portfolio spanning more than 100 patents pending and issued. (See BioWorld Today, Feb. 15, 2000.)

Eventually, Bioatla is likely to partner with a U.S. or European-based company, potentially licensing rights to its internal programs for development outside China.

In November 2014, the company formed an agreement with long-time partner Bioduro LLC, now part of Pharmaceutical Product Development LLC, to collaborate on the development of two undisclosed therapeutic monoclonal antibodies in China, a collaboration eased by the fact that they share lab space in Beijing. Under the direction of Bioatla, each candidate – one from Bioatla's non-CAB pipeline and the other the companies built together – will be licensed to local Chinese biopharma companies for later-stage clinical development and commercialization in China.

Bioatla is also continuing to work with Biomotiv LLC, the therapeutics accelerator for the Harrington Project for Discovery & Development, to which it licensed exclusive worldwide rights to develop and commercialize a TH22 pathway-directed antibody for the treatment of inflammatory bowel diseases and oncologic indications. In conjunction with the agreement, Biomotiv established Cleveland-based Kodosil Bio, which will develop all compounds resulting from the license. That project is progressing well, Short said.