Lowry Curley, CEO of biotech startup AxoSim, recalled Thursday how his company was “just two guys in a broom closet at Tulane” not long ago, as he cut the ribbon on laboratory space that will double the firm’s footprint at the New Orleans BioInnovation Center.
The company, which was spun out of Tulane in 2014, has developed technology that simulates human nerves and gives pharmaceutical companies an animal-free testing alternative that can radically cut the time it takes to bring drugs to market. The technology has proved particularly effective for testing treatments for degenerative neurological disease, such as Alzheimer’s and Parkinson’s.
“We grew so much last year that we had to double our space to 4,000 square feet, which is pretty cool,” Curley said. The firm now has 32 full-time employees, including scientists, commercial staff and support.
AxoSim was funded early on with grants from government agencies such as the National Institutes of Health and the National Science Foundation. It quickly found private investor support from the likes of Benson Capital Partners and Jefferson Capital Partners, and has raised more than $10 million for rapid growth. Lowry said the company is completing another round of fundraising for further expansion.
The latest interest comes after congressional approval in 2022 of the Food and Drug Administration Modernization Act 2.0, which lets pharmaceutical companies use high-tech new tools to collect initial data instead of using live animals. The FDA was allocated $5 million to speed the use of these new tools.
Filling the gap
“We’re filling a critical gap, particularly in neuroscience where these animals have failed [to provide effective testing] time and time again,” Curley said. The federal government “is really looking at this and saying, ‘This is really working in these human models.'”
BioDistrict New Orleans Chairman Andy Kopplin said AxoSim’s growth demonstrates the potential for developing other such New Orleans-based companies.
“I can’t wait to see how many more home-grown tech startups we can nurture and how they can create jobs and opportunities for our region,” said Kopplin, CEO of the Greater New Orleans Foundation as well as chairman of the BioDistrict.
After decades of delay, the BioDistrict finally won approval last year from the City Council for a slice of taxpayer money to fund its mission, to promote an area that incorporates New Orleans BioInnovation Center as a hub of science innovation and entrepreneurship.
Kris Khalil, head of the New Orleans BioInnovation Center and its investment arm, BioFund, said AxoSim’s development is part of the “cluster building” necessary to put New Orleans on the map and encourage other such companies to stay and grow in the city. He said the BioInnovation Center has several other companies on a similar path.
Building the ecosystem
“AxoSim is a pure example of what can be done here in New Orleans: building biotech companies here and scaling them,” he said. “It’s a sign of the maturity of our risk captital ecosystem.”
Kris Khalil, Executive Director at New Orleans BioInnovation Center & Managing Director at BioFund.
Another often-cited example is Obatala Sciences, which was nurtured by the BioInnovation Center and has has grown and attracted investment capital in recent years. It is in similar space to AxoSim, offering technology that increases the diversity of testing techniques for new treatments and can speed the process of bringing them to market.
Another promising company, Khalil said, is Chosen Diagnostics, an LSU Health Sciences Center spin-out firm. It is developing testing for early detection of necrotizing enterocolitis, a life-threatening intestinal illness affecting infants born prematurely.
A third is WayPath Pharma, formed in 2019 by two LSU students, which is developing a treatment for hemangiosarcoma in dogs, an aggressive brain cancer. The treatment would be developed first for canines then might be applicable to human beings.