Having caught the attention of the pet world with its lymphoma treatment for dogs, Long Beach life sciences firm Anivive Lifesciences seeks to make a bigger splash this year.
The company is planning to launch an anti-fungal vaccine — the first ever — this year targeting a fungus-based disease that threatens up to 30 million dogs. Anivive also expects to be able to pivot that product for use in humans, who are also affected by the same disease. Down the line, the company has a slew of other pet-related treatments in various stages of the approval process and thinks it is in the right position to capitalize on an unsaturated market.
“The No. 1 criteria for us is that there’s not an existing approved treatment for it,” said Chief Executive Dylan Balsz. “We really wanted to zero in on these deadly diseases that didn’t have any options for veterinarians.”
To help propel that research and development forward, Anivive this week is kicking off an outside fundraising campaign, targeting $50 million in investments. This would double the company’s total fundraising, after its founders and board members internally pooled together its initial funding.
“Now that we have our first drug on the market and we have a vaccine about to launch, the decision is now to go out and raise another $50 million,” Balsz said.
Profitable year
Founded in 2015, Anivive entered the pet pharmaceutical marketplace in 2017 when it licensed an oral lymphoma treatment for dogs. The drug became available to consumers in 2021.
Balsz said his team was able to act quickly on developing this treatment by leveraging existing research on treatments for people. He noted that when recruiting team members for the project, the company’s possession of three years’ worth of data proved to be a good lure.
The success of that treatment has started to prop up Anivive, according to Balsz, which had its first net profit last year and is now gearing up to put its new vaccine, for Valley Fever, onto the market.
“We were able to be profitable last year. This year, we’re investing heavily in this launch, so we expect to return to profitability within the next 12 months,” he said. “We didn’t expect this economic environment, but it’s given us the runway to fund this launch.”
And Anivive was able to wait to seek new outside funding.
In recent presentations to private equity, venture capital and other investment firms, Balsz has highlighted that with around $10 million in cash on hand, Anivive has at least 12 months of runway. Last year, the company posted a net income of more than $5 million, after losing $12 million in 2021.
The company started off with $50 million in self-funding, all essentially from co-founders, board members and the management team. This year the company is hoping for an equity raise between $15 million — which would allow for three new drug approvals — and $50 million, which would allow five new approvals and two commercial launches.
Additionally, eight different university groups are involved in research and nearly $20 million in grants have allowed Anivive to contract outside researchers to contribute.
“The part that grabs a lot of attention for these groups is that they’ve never seen a biotech company that’s been primarily funded by its management team and board. Usually by this stage, the founders have been diluted to nothing,” Balsz said. “Our motto has essentially been, ‘How can we improve this to where we can before we turn to outside capital?’ We’ve proven it can be done, and in a profitable way, and not a burn-through-cash kind of approach.”
Meanwhile, a slew of other investors has helped move Anivive along with getting its Valley Fever vaccine out to dogs once its ready. Those investors include current and former NFL stars Jamal Adams, John Elway and Rob Gronkowski, as well as Glenn Stearns of “Undercover Billionaire” fame and Gavin Herbert Sr., the founder of Allergan.
A few goals are motivating Anivive’s targeting of Valley Fever, a disease caused by a fungus found mostly in semi-arid desert soil such as that in the Southwestern United States.
One is that the illness can cause severe lung damage, along with skin and bone lesions, in dogs.
Dr. Dirk Yelinek, founder and chief of staff of Redondo Shores Veterinary Center in Redondo Beach, said the disease is not terribly common in Southern California but is endemic in Arizona, Utah, Mexico and other parts of Central and South America. The fungus has a 20% to 40% rate of infecting dogs, according to studies Yelinek has read.
Targeting Valley Fever
“Knowing of it in the animal world, there’s about a 90-plus-percent success rate if it’s caught and treated early,” he said. “From what I understand, they’ve been trying to work on a vaccine for 50 years or so.”
The fungus also infects around 20,000 people each year, Yelinek added, and those who are immunocompromised are especially vulnerable to it. On top of the painful symptoms of the disease, it also becomes very expensive to treat once the infection takes hold.
“Aside from what it does to the body, financially it’s a problem for pet owners because they have to be treated for a usually up to a year with antifungal medication,” he added.
Luckily, in addition to the dog version, Anivive also owns the license for the vaccine’s potential use for humans and will work with another company to develop that model, Balsz said.
“The dog vaccine is the major proof of concept for the possibility of a human vaccine,” he said. “The ridiculous part of the story that I initially had no appreciation for is the fact there’s never been an antifungal vaccine in history. The third infectious life form other than viruses and bacteria is fungus, and the problem with fungus is that their DNA is more complex. There’s a reason there’s never been one, and its sort of comical that the first one is coming through a vet company and will pave the way for a human path.”
It hasn’t been a simple path. Balsz said his company tested more than 80 variations of the vaccine before arriving at one that worked — and was affordable.
And since no existing manufacturing facilities are legally allowed to have fungus on site, Anivive has had to design one from the ground-up.
“I think that’s why we’re fortunate that all of our investors have been management and board members, because if it was venture capital, after test number five, they would have shut the thing down,” Balsz said. “And the vaccine will be $20. We’re trying to make this so that it’s a similar price to other vaccines. Getting this to a point where we can get it to a vet for $20, that’s been a major, major focus.”
Anivive is projecting high profitability for the Valley Fever vaccine. With 7,275 prospective veterinarian accounts inoculating nearly 800 dogs with two doses a year, the company is forecasting roughly $187 million in revenue over a five-year period, Balsz said.
This revenue would propel work on other treatments and vaccines, including for osteosarcoma, blastomycosis, feline gingivitis and histoplasmosis, and Anivive is already well on the way to bringing treatments for feline coronavirus and canine hemangiosarcoma through FDA approval.
In its investment pitches, the company is citing predictions that the pet expenditures in the U.S., where 70% of the population owns pets, may double by 2030 to a market size of $275 billion.
“To have an industry of this size set to double by the end of the 2020s is sort of unheard of,” Balsz said. “When you look at that growth, there’s not a lot of competition in that sector, but that’s one of the most profitable and needed sectors.”
Yelinek, a past president of the California Veterinary Medical Association and a member of the National Veterinary Response Team, noted there are many factors that go into a vaccine’s approval by the Food and Drug Administration — one of which is affordability.
“I know for a vaccine to be useful, there are certain criteria that have to be met,” he added. “They have to be efficacious, they have to be safe and they have to have a stable shelf life.”
