ImmusanT Inc. is taking its Nexvax2 program for celiac disease to the next level, raising $20 million in a Series A from Vatera Healthcare Partners LLC to fund the immunotherapeutic vaccine and a companion diagnostic to proof of concept.

Earlier this month, the company held a pre-investigational new drug application meeting with the FDA, according to Leslie J. Williams, ImmusanT's founder, president and CEO. The company will incorporate the agency's recommendations into Phase Ib/IIa trials for Nexvax2 in the U.S. and Australia, which will begin enrolling in the first quarter of 2012.

Williams was mum on the design of the trials and filing timetable, but said the company expects to see top-line data by the end of next year.

'We know what we need to do to advance the celiac program in the clinic,' she said. 'We have a plan, based on the feedback that we've received from the FDA, and we are marching forward with that plan.'

Nexvax2 combines three proprietary peptides that elicit an immune response in patients who carry the immune recognition gene HLA-DQ2 – approximately 80 percent of those with celiac disease. The peptides, which render gluten toxic to individuals with the disease, were discovered by Bob Anderson, the company's scientific founder and chief scientific officer.

Anderson, a gastroenterologist and professor at the Australian Walter and Eliza Hall Institute, plans to relocate to the company's Cambridge, Mass., headquarters next month.

Nexvax2 is designed to enable those with celiac disease to tolerate gluten and return to a normal diet. In May, the company presented Phase I data at Digestive Disease Week showing that Nexvax2 was well tolerated and induced a T-cell response confirming bioactivity in celiac disease patients with the HLA-DQ2 genotype.

In parallel with the vaccine, ImmusanT is developing a whole-blood functional T-cell test for use both as a standalone diagnostic for celiac disease and as a monitoring tool for the therapeutic. In the company's dual-track product development strategy, clinical trial subjects will be screened using the diagnostic along with standard serology tests to identify patients most likely to respond to Nexvax2.

The company's diagnostic for celiac as well as its approach to focus on the HLA-DQ2 subtype and to treat the underlying disease 'as an autoimmune disease with an allergic component' are fundamental differentiating strategies for ImmusanT, a name that roughly translates from Latin as 'free of health constraints' using 'T' cell therapeutics. (See BioWorld Today, Mar. 23, 2011.)

The Series A gives ImmusanT a runway of three to four years to prove that approach, Williams said. The company plans to add two key team members, but intends to continue operating largely as a virtual organization.

As ImmusanT's sole investor, Vatera serves as an 'ideal strategic partner and collaborator' because 'they're in it for the long haul,' Williams said. 'They look at building and funding companies through market approval.'

Vatera was established by Michael Jaharis, who founded and sold both Koz Pharmaceuticals, acquired in 2006 by Abbott, and Key Pharmaceuticals, which merged with Schering-Plough in 1986. Usually a late-stage investor, Vatera participated in the Series D offering by AVEO Pharmaceuticals Inc. and the Series C financing for Pearl Therapeutics last year. (See BioWorld Today, May 4, 2007, and Oct. 19, 2010.)

Beyond celiac disease, privately held ImmusanT plans to apply the knowledge gained from the Nexvax2 program to its targeted immunotherapy discovery platform in other epitope-specific autoimmune diseases, such as Type I diabetes.

'We're focused on building the toolkit as we advance in the clinic with celiac disease,' Williams said.

An inherited autoimmune disorder, celiac disease is triggered by foods containing gluten – the main protein in wheat, rye and barley – which affect the digestive process of the small intestine. Delivered intradermally in small doses, Nexvax2 reprograms the disease-causing T cells triggered by the immune response to gluten, reducing inflammation in the villi that line the small intestine and enabling the intestine to return to a normal, healthy state.

'Celiac is the only autoimmune disease in which we have a very clear understanding of the dominant peptides that cause the immune response,' Williams explained. 'When patients are treated – for example, when they go on a gluten-free diet – the damage is reversible. Because of this, we can learn a lot that can be applied to other autoimmune diseases.'

Long term, the company will seek to link with a large pharma, either through a strategic collaboration or outright acquisition. Since ImmusanT's platform includes second-generation delivery mechanisms, partnering discussions could begin even before the Phase Ia/IIb studies are complete.

If the company's technology succeeds, ImmusanT might have its pick of partners, as competition in the celiac disease space is sparse. Cephalon Inc. might have been a formidable contender with its $7 million option earlier this year for midstage celiac disease candidate larazotide acetate from private biotech Alba Therapeutics Inc., of Baltimore. (See BioWorld Today, Feb. 11, 2011.)

However, Cephalon was subsequently acquired by Teva Pharmaceutical Industries Ltd., of Jerusalem, which outbid Canada's Valeant Pharmaceuticals International Inc., largely on the strength of Cephalon's oncology and pain pipelines. The fate of the celiac disease compound remains unclear. (See BioWorld Today, March 30, 2011, and May 3, 2011.)

Another potential rival may be privately held Alvine Pharmaceuticals Inc., of San Carlos, Calif., which has attracted a bevy of investors while developing ALV003, an oral mixture of a glutamine-specific cysteine protease and a proline-specific prolyl endopeptidase, in celiac disease.

In October, Alvine presented Phase IIa data at the United European Gastroenterology Week congress showing ALV003, given with a gluten-free diet, significantly reduced gluten-induced intestinal mucosal injury in well-controlled celiac disease patients, with no serious adverse events. The company is preparing to launch a Phase IIb trial of the drug next year.