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12:00 AM
 | 
Mar 28, 2005
 |  BioCentury  |  Product Development

Tilting at windmills

Third World Solutions

Tilting at windmills

The experience of Maxygen Inc. in monetizing the various applications of its directed evolution platform perfectly illustrates the problems companies encounter when they try to commercialize vaccines, even with the best will in the world.

The company’s commercial focus is the development of improved protein therapeutics, with four candidates in preclinical development to treat hepatitis C, neutropenia, uncontrolled bleeding and other oncology and infectious disease indications.

But when MAXY was founded in 1997, management didn’t know where the technology could go, and so let it run in a number of directions using a variety of internal and external funding sources. In vaccines, this included money from DARPA for DNA vaccines, followed by USAID money for a malaria vaccine and from the Rockefeller Foundation for an HIV vaccine. In all, MAXY has received $26.3 million in vaccine-related funding, with another $2 million in committed funding yet to come.

Ultimately, the company decided that it wouldn’t go forward with two other programs - agricultural and chemical - but was able to monetize both. In ag, MAXY formed Verdia Inc. (Redwood City, Calif.) and sold it to DuPont for $64 million in 2004. For chemical applications, MAXY formed Codexis Inc. (Redwood City, Calif.) and spun it out at the end of 2002 with $25 million in venture funding. Pfizer Inc. (PFE, New York, N.Y.) recently invested $10 million at $100 million pre-money.

The same couldn’t be done for vaccines. "I was unable to convince myself or my colleagues that there was a viable business in vaccines," said CEO Russell Howard. "Despite $26 million in vaccine funding, we couldn’t build...

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