NovaCal
Pharmaceuticals HQ n California
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By
Editorial Staff
Of
the 55 companies that presented to more than 100 of the most active
Silicon Valley and Sacramento venture capital investors at the Golden
Capital Network Sacramento Venture Capital Conference, the judging
panelists deemed NovaCal Pharmaceuticals, an East Bay bioscience
company that manufactures a revolutionary solution for the care
of chronic wounds, the Best of Show. “NovaCal was the clear
winner based on the size of the market, the strength of its management
team, the revolutionary nature of its technology and the defensibility
of its market position,” said John H.N. Fisher, Managing Director
of Draper Fisher Jurvetson, one of the judging panelists.
NovaCal Pharmaceuticals was founded by Dr. Ramin (Ron) Najafi. This
is his third entrepreneurial venture. Dr. Najafi, who has a PhD
in chemistry from UC Davis, had previously worked in the pharmaceutical
and biotech industry at Rhone Poulenc Rorer and at Applied Biosystems,
where he was recognized as “Scientist of the Year”.
Working with Dr. Mansour Bassiri, who is NovaCal’s Director
of Cell and Microbiology, Dr. Najafi focused on making the same
chemicals that white blood cells use to kill bacteria and other
microbes. “Manufacturing and formulating these chemicals so
that they can be used as anti-infective products has been a major
breakthrough that required several scientific discoveries to ensure
that they could be put in a bottle with adequate shelf-life”,
said Dr. Najafi. “NovaCal has succeeded in finding out how
to make these chemicals usable and how to preserve them for long
periods”.
“Not only has NVC-101 proved to be highly anti-microbial”
says Dr Bassiri, “but it is safe for use in the eye and at
the proposed dosage does no harm to human cells.” In addition
to laboratory and animal studies, a safety study on patients with
91 wounds was conducted at Seton Wound Care Center, which showed
that even in the very sensitive conditions of chronic ulcers wounds,
NVC-101 appeared to be safe and to be reducing or eliminating infections
that delayed healing. What makes these results important is that
the U.S. Public Health Service condemns the use of all other anti-infective
solutions on ulcer wounds, because they are all cytotoxic at the
doses required. There are 3 million people suffering from chronic
ulcer wounds in the United States and these are constantly being
infected.
Left
to right: Jack O'Reilly, NovaCal's CEO - Jane Yang, Chemist &
Microbiologist - Ramin Najafi Ph.D., Founder - Dr. Lu Wang, Director
of Chemistry - Mansour Bassiri, Director of Micro & Cell Biology
NVC-101’s strong anti-microbial impact has been confirmed
by tests at Lawrence Berkeley National Laboratories, where it rapidly
killed anthrax spores. Based on these positive results, the Defense
Department is about to test NVC-101 against anthrax in the lungs
of animals. “There is a long way to go before we can say whether
NVC-101 is effective against inhaled anthrax”, says Dr. Najafi,
“but if it does work that would be a real bonus”.
One of NovaCal’s Board Members, Paul Freiman, the former Chairman
and CEO of Syntex Corporation and the current CEO of Neurobiological
Technologies, introduced Dr Najafi to Jack O’Reilly early
last year. Jack headed Corporate Development at Syntex and has headed
other early-stage biotech companies. “When Ron asked me to
join the company as CEO,” said Jack, “I spent a day
at Seton Wound Care Center and I was convinced by looking at the
data and by talking with the staff there that NVC-101 had helped
their patients. Our task now is to do everything that is necessary
to obtain approval from the FDA to enable all patients to benefit
from this unique product”.
NovaCal raised $1.1 million in a Series A financing and has just
started raising a Series B financing and $0.5 has been subscribed
to date. NovaCal is continuing discussions with potential investors.
The Series B financing is designed to fund NovaCal’s initial
clinical trials. The company is currently valued at about $8 million.
“With a successful clinical trial, the valuation for the next
round should be about $40 million,” estimates Jack O’Reilly.
Dr Najafi believes that NVC-101 could be used on 700,000 patients
that arrive in the emergency room with serious burns, in the prevention
of infection in surgery and in ophthalmic infections. “Every
time we talk with Directors of Infection Control at major hospitals,
they come up with new needs for products like ours”, says
Dr. Najafi.
“The market potential for our products is so broad, that it
would be a great mistake for a small company to attempt to market
them. With such a wide range of applications, the total market potential
could be in the billions”, says Jack O’Reilly, “We
expect to be able to sell the company to a major pharmaceutical
multinational when we have completed the package required for approval
by the FDA. This should be in 2005/6. Based on comparable valuations
for companies with products at that stage we would expect a sale
price in excess of $500 million, obviously provided that our trials
are successful.”
NovaCal is not just depending on NVC-101. It has recently filed
patents on a new compound, NVC-320, that Dr Najafi, Dr Lu Wang,
NovaCal’s Director of Chemistry, and Dr. Bassiri have been
working on. This compound is also produced as a result of the activities
of white blood cells. Dr Najafi says “NVC-320, our new compound,
adds significantly to the strength of our company, because it is
long acting and amazingly safe in early tests.”
Based on the strength of its R & D, NovaCal looks as if it could
be one of the leading biotech companies in the anti-infective arena.
For more information, please contact Dr. Ramin (Ron) Najafi
at 415-747-2087 or najafi@novacal.com.
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