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NewCo News: RxBio Works on Bridge from NIAID to BARDA

May 19, 2011

RxBio Inc. is currently part of the Memphis Bioworks incubator.

RxBio Inc. has been hard at work building the funding bridge it's counting on to take its lead candidate, RX100,
down the home stretch toward approval.

In the early stages of developing the countermeasure for acute radiation sickness (ARS), the Johnson City, Tenn.-
based company received funding from the National Institute of Allergy and Infectious Diseases (NIAID). But now that
RX100 is in late-stage development, RxBio is turning to the Biomedical Advanced Research and Development
Authority (BARDA).

The privately held company is discovering that the transition from NIAID to BARDA can be a lengthy process. It has
been working on a response to a BARDA broad agency announcement for two years and is on its fourth edition,
RxBio CEO W. Shannon McCool told BioWorld Today.

Rx100 is a small-molecule analogue of an endogenous, prosurvival molecule that holds promise as both a
radioprotectant and radiomitigator. Developed at the University of Tennessee Health Science Center and licensed
from the university's research foundation, Rx100 can be given orally or subcutaneously up to 72 hours after
exposure to lethal, whole-body radiation.

Unlike several ARS treatments already under contract with BARDA, Rx100 can take on higher doses of radiation,
protecting bone marrow and critical stem cells in the small intestine from damage. In an animal study, 14 percent of
the control group survived radiation doses of 11.5 Gy to 12.5 Gy. The Rx100 treatment arm saw 50 percent survival.
"We knew the basics of Rx100 four years ago," McCool said. But the compound's advancement has been slowed by
funding as the company tries to bridge from the early assistance offered by NIAID to a BARDA contract. (See
BioWorld Today, April 19, 2011.)

Since RX100 protects the stem cells in the crypt-villus units that line the small intestines, it also holds promise as a
treatment for potent chemotherapy and secretory diarrhea caused by a cholera toxin.

"It turns out that protecting that stem cell works for a lot of things," McCool said.

In early stage development, the candidate has protected the gut from "anything we've thrown at it," he added.

While the company plans to develop the molecule to its full potential, RxBio is focusing on the medical
countermeasure indications first. "It's something we've given a priority, in large part because we think our country
needs it," McCool said. "And the world needs it."

Once the company secures BARDA funding, it would take four to five years before the drug is ready for FDA
approval and a national stockpile procurement contract.

Meanwhile, RxBio has an agreement with NIAID on further testing of Rx100 and is pushing its other ARS candidates
forward. "We're not a one-dog pony," McCool said.

Also in the works is RX101, an analogue of RX100 that appears to be more effective in treating lower doses of
radiation, and EDL2000, an anti-inflammatory licensed through the University of Tennessee Research Foundation
that may have broad applications, including Type II diabetes.

As with its lead candidate, RxBio has pursued government funding to develop the ARS indications of the other
products. For instance, it has a contract with the Armed Forces Radiobiology Research Institute to test EDL2000 as
a radiation countermeasure.

While its current focus is on ARS development, the start-up biotech is not ignoring other possibilities. EDL2000 is
piquing the interest of big pharma. At this point, RxBio is open to anything that helps move its molecules down the
pipeline, McCool said.

A big pharma veteran – he worked for Eli Lilly and Co. and Beecham U.S. before starting his own consulting firm –
McCool launched RxBio 10 years ago and began licensing promising candidates a few years later. Rather than build
the company around a lead scientist, McCool put together a management team with significant industry experience.
Management is paid with stock options. The company reduced its overhead expenses by sharing facilities and
equipment with the Fallon Group LLC, McCool's management consulting group. Because of the shared facilities and
stock-option payment, RxBio can operate at 30 percent to 35 percent of the burn rate that's normal for most startups,
McCool said.

Maria Serebrov
Washington Editor
BioWorld Today May 18, 2011

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