Kineta acquired the exclusive license to the synthetic compound from the University of California Irvine with the intention of developing it commercially. During the last few years, it has raised $10 million for lab testing, developing a shelf-stable formula, manufacturing work and animal toxicology testing.
It has completed clinical trials on 32 healthy humans to test it for safety. After testing multiple doses of the drug on both healthy and unhealthy people, the company will be ready to license the drug to a pharmaceutical company. Magness says he's already in licensing discussions.
Unlike the traditional venture capital model, however, investors were not brought in until well past the discovery stage, in the middle of the pre-clinical stage. The plan is for an exit at the end of phase I trials, a period of time that is projected to max out at 30 to 48 months. (Although the company expects to spend $10 million on each of the drugs it develops, it does not raise all the funds at once.)
The advantage to this approach, Magness says, is that it's more efficient and reduces risks for investors, as well as for pharmaceutical companies. Kineta's employees divide their time among Kineta's three LLCs. Investors, in the meantime, do not have to wait for a drug to be a success—and can earn a handsome return even if a drug ultimately never makes it to market.