Following the Money
Stephen Cary, Ph.D., CEO and co-founder of Omniox, told GEN the capital squeeze has his company considering expanding overseas. Omniox is in preclinical development of its oxygen-binding proteins as treatments for cancer as well as heart attacks, strokes, and battlefield wounds. The company has about 10 employees and raised over $4 million from NIH plus funds that include a $250,000 grant from the Rogers Family Foundation and a $244,000 tax grant through the Qualified Therapeutic Discovery Project program.
Omniox should be a poster child for California biopharma. Dr. Cary based the company on the technology of in-state biochemist Michael A. Marletta, Ph.D., who on January 1 became president of The Scripps Research Institute after a decade at University of California, Berkeley. Omniox occupies space at the QB3 Garage, the incubator run by the California Institute for Quantitative Biosciences (QB3), which consists of UC’s San Francisco, Santa Cruz, and Berkeley campuses. The company has a second facility in Sunnyvale, CA.
Dr. Cary says California has many strengths for biopharmas, notably a critical mass of researchers and investors with experience launching new companies as well as professionals specializing in helping startups. Two law firms have carried out “maybe a million dollars worth of work” at deferred costs for Omniox, he said, while a former FDA official has provided pro bono advice on regulatory strategy.
Despite such strengths, the availability of investor cash may drive Omniox to grow outside the U.S. “This year, we’re going to look and maybe by the end of the year have operations overseas,” Dr. Cary stated. “It could be England. It could be Asia. It could be both. There’s money outside the United States.” He pointed to programs of the UK’s Medical Research Council and Cancer Research UK.
“Depending on where we get funding, instead of expanding in San Francisco, we might expand overseas. There’s funding overseas to fund a team that’s 10 times the size, that can go 10 times as fast, and we can move the science forward that way,” Dr. Cary said.
“We’d keep our core in California. We are the most innovative here. But developing new therapeutics can require iterating around a central theme, and sometimes that just takes a lot of hard work, and people doing the science at the bench. It may be more cost effective and feasible to do that outside the U.S., especially if there’s funding support.” But if a significant investor surfaced in California, he added, Omniox would continue its growth in-state.
During the phone conference, Dr. Cary recalled how at the J.P. Morgan 30th Annual Healthcare Conference in San Francisco earlier this month, “I met a very deep pocketed Asian investor, who was practically throwing money at us from across the table to move to Asia and really expand.”
“We also met with a VC from the Cambridge area. They also asked us to move our company to Boston, and they would fund that,” Dr. Cary added. “These are options that in the absence of any other option make it tough to see your way through where we are now, which is why my top priority is to find a California investor, so we can continue to stay here and control our science.”