Seth M. Shaw, Chairman and CEO of Danbury, Conn.-based Immunovative, Inc. (OTCQB: IMUN), talks with the Opportunist’s Managing Editor Leslie Stone about his company’s proprietary method of harnessing the immune system to treat cancer and infectious diseases.
The scientific world has long held the belief that immunotherapy would one day provide cancer patients with safe and effective treatment options—or even have the potential to cure them of the disease. Unfortunately, cancer vaccines and cell immunotherapy methods have had difficulties in translating the promise of immune control into effective treatments. Immunovative specializes in the development of novel immunotherapy drug products that incorporate living immune cells as the active ingredients for treatment of cancer and infectious disease. The company has developed an immunotherapy concept that, according to its initial clinical data, is indicative of a possible breakthrough in the advancement of immunotherapy to treat cancer and infectious diseases. “I believe that Immunovative offers a unique opportunity to both capitalize on a cutting edge technology and potentially help numerous cancer patients across the globe,” says Seth Shaw, who personally visited the company’s Phase I/II human trials in March 2010 and met with many of the clinical trial volunteers. During the past seven years Shaw has secured more than $60 million in capital for several small-cap and micro-cap companies.
Opportunist: You have an extensive background in the capital markets. How did you get into the industry?
Shaw: After graduating from Cornell University in 2001 with a degree in Policy Analysis Management and a concentration in Econometrics, I went to work for American International Group (AIG) Global Investment Group. Eventually, a Manhattan-based hedge fund recruited me and I spent some time there before deciding to branch out on my own.
I have essentially focused my career on looking for undervalued—or off-the-radar—companies that are typically too small to be discovered and yet have enormous upside. They are what I’d call hidden gems. I have also cultivated relationships with a number of prestigious institutional investors, who can assist these companies by providing the capital they need to get to the next level. I also provided management consulting services and I personally invest in each company and occasionally run the company if it makes sense to do so for a period of time.
Opportunist: What are some of the companies you have founded and/or helped to advance?
Shaw: In 2005 I founded a natural resources exploration company called Novastar Resources Ltd., which was focused on the exploration and acquisition of mineral properties containing the element thorium—an alternative to uranium for fueling nuclear reactors. I raised $17 million in financing for Novastar and helped complete their merger with Thorium Power. I was the new company’s director of strategic planning for about five years. Incidentally, that company changed its name to Lightbridge Inc. and currently trades on the NASDAQ with the symbol LTBR.
Uni-Pixel Inc., the flat-panel display developer listed on NASDAQ (UNXL) and Physician Therapeutics LLC, a company that merged with Targeted Medical Pharma (OTCQB: TRGM).
I would say these companies were somewhat high risk but also high reward. I find that is the only way to create a lot of value in a short amount of time. Many of these startup companies will go out of business if they don’t get money at the right time. Sometimes, just having a little bit of help at the crucial moment is exactly what they need to succeed.
Opportunist: Immunovative is a catchy name. Please tell us the history behind the company.
Shaw: Immunovative Therapies Ltd. is a private Israeli biopharmaceutical company founded in 2004 by world-class immunologist Dr. Michael Har-Noy. The name was probably chosen because of the company’s innovative approach to immune-based cancer treatments. Dr. Har-Noy worked in bone marrow transplant at Hadassah Medical Center for a number of years and was interested in anticancer treatment that uses grafting of an immune system from a donor into an individual inflicted with cancer. He recognized that the recipient’s body will detect and attack those cells and this has been heralded as one of the strongest anticancer fighting discoveries ever made. In fact, the company was formed in partnership with an incubator fund called Misgav Venture Accelerator. Misgav is a member of the prestigious Israeli technological incubator program, and Immunovative was their candidate for the prize for outstanding incubator project of 2006, awarded by the Office of the Chief Scientist. The company has received numerous grants and also has a partnership with Hadassah Medical Center. In fact, Hadassah owns a small equity stake in the company.
Immunovative Inc. is the publicly-held commercial arm of the company. In December of last year it signed an exclusive license agreement with Immunovative Therapies, Ltd. to been granted an exclusive, worldwide license to commercialize any products covered under their current issued and pending patent application portfolio. We also have the rights to any future patent applications, including improvements or modifications to the existing applications and any corresponding improvements or new versions of the existing products.
Opportunist: What is your role as CEO?
Shaw: My main goals are to provide the company with the requisite capital to both run a successful pivotal Phase II/III trial for our drug candidate Allostim, as well as build the future pipeline through partnerships with prestigious academic and medical institutions. My additional goals are to build lasting shareholder value through the successful development of the technology and potentially provide a viable treatment option for late-stage cancer patients who have exhausted all other treatment options.
Opportunist: How is Immunovative’s technology different?
Shaw: The premise behind Immunovative is that it harnesses the power of the immune system in fighting metastatic cancer without the lethal side effects of graft versus host disease (GVHD), which is a common complication of a bone marrow or stem cell transplant. Essentially, we want to use the immune system to take a systemic approach to fighting metastatic cancer. If you had the flu, for example, your body would use the immune system to fight it. Our technology uses the same principles to treat patients whose cancer has spread. Rather than trying to find the cancer and treat it before it has spread, we treat it after the fact. And we believe we can do it without some of the traumatic side effects. Traditional cancer treatments mean you have to catch it in time and cure the patient in surgery or introduce highly toxic therapies like chemo or radiation in an attempt to stop the spread of cancer. The patient will likely die from that cancer, with some exceptions. The treatment has not changed much in a century; either you get it in time or you don’t.
Opportunist: We understand the company recently received some very important patents. Can you tell us about those?
Shaw: Absolutely. We were granted a U.S. Patent titled “Method for Allogeneic Cell Therapy.” What our method does—and I will try my best to explain this in nonscientific terms—is utilize immune cells from a normal donor to elicit an anti-tumor mechanism that mimics the graft versus tumor (GVT) effect of non-myeloablative allogeneic stem cell transplants without the toxicity of GVHD. The most effective anti-cancer mechanism ever discovered is the GVT immune response that occurs after mini-transplant procedures. This mechanism can completely destroy chemotherapy-resistant metastatic cancers. Unfortunately, the clinical use of the GVT effect is severely limited due to extreme toxicity—called GVHD effect. So, mini-transplants are now only widely used in advanced cases of leukemia, even though the GVT effect has been shown capable of killing many types of solid tumors. The separation of the beneficial GVT effect from the devastating GVHD toxicity has long been the goal of stem cell transplant scientists and is the subject of extensive research around the world. Foreign versions of our patent are also pending around the world.
Opportunist: That’s exciting news. Does the company have any strategic alliances and/or joint ventures?
Shaw: Yes, we recently entered into agreements with Northwestern University and the University of Arizona to develop our two lead immunotherapy drugs, AlloStim™ and AlloVax™. We are providing Northwestern with our two lead drugs, known as ‘study drugs,’ to transfer technology for immunological monitoring of patient blood and tumor samples and for producing mouse versions of the drugs. The whole process is basically aimed at learning more about the clinical activity and side-effects of these drugs. Northwestern is also planning to do their own additional research on the patients receiving our drugs to determine which ones are the best candidates for the drugs. Their research is expected to help us figure out ways to improve the drugs and whether they should be combined with other drugs—in both human and animal trials.
Opportunist: Are you targeting specific types of cancer in these clinical trials?
Shaw: Yes. We recently received regulatory approval to conduct a Phase II/III trial from the government of Thailand for breast cancer. Our collaborative agreement with Northwestern will focus on pancreatic cancer. Those efforts will be led by Dr. Mary Mulcahy, and breast cancer efforts will be led by Dr. Sarika Jane and Dr. William Gradishar, Director of the Maggie Daly Center for Women’s Cancer Care. Dr. Khashayarsha Khazaie will lead the immunological monitoring and animal study efforts. The trial at the University of Arizona will focus on leukemias and cancers that affect children, in partnership with Tee Up for Tots Foundation.
Opportunist: Do the pharmaceutical companies see you as a threat?
Shaw: Fortunately, I don’t think they will see us as a threat. Chemo and radiation are a multibillion-dollar industry but our drug is specifically being tested on late-stage cancer patients. We focus on patients that have exhausted all other treatment options—the thousands in hospice dying of cancer. We do not interfere with chemotherapy or surgery or radiation. Our goal is to show that we may be able to provide help for patients who are at the very last stages, essentially dying and by harnessing the power of the immune system we are able to accomplish something that nobody else has ever done. We do have a major pharmaceutical very interested in us, although it is too early to say if there will be a joint venture at some point.
Opportunist: What do you enjoy most about your work?
Shaw: Besides the migraines I get from the stress [Laughs], I enjoy the fact that I can actually make a difference in the world. What I enjoy most about financing and running a small company is the fact that you can actually use your Rolodex and your brain to create something new. I find it very rewarding and I like the idea of creating something that would not exist otherwise.
Opportunist: What is your greatest accomplishment?
Shaw: Personally, I would say the fact that I have secured over $75 million for small companies. In terms of the company, I would say our efforts in trying to bring a drug to market that essentially has the potential to save or prolong lives.
Opportunist: Where do you see the company—and immunotherapy in general—headed in the coming years?
Shaw: Immunotherapy is a very fast-moving field and clearly the future of treating cancer patients. Historically, the school of thought was that a weak immune system caused cancer. We are discovering that is, quite frankly, not true. I believe that immunotherapy holds the potential to one day curing cancer because the immune system is the only way to take a systemic approach. All treatments—especially for late-stage cancer patients—will eventually involve the immune system in some capacity. It won’t replace surgery, chemo or radiation but, in terms of late-stage treatment, it will be by far the most prevalent treatment option in the future. We hope to demonstrate that patients who had no hope before may actually have hope because the immune system is something that is a systemic entity and our approach is a way of making cancer treatment systemic rather than localized.
Opportunist: What objectives would you like to see Immunovative achieve in 2013?
Shaw: To increase the number of partnerships that we have with prestigious academic and medical institutions. To successfully launch our first Phase II/III pivotal trial for breast cancer. To improve our balance sheet through a large institutional raise or a strategic investment from a large pharmaceutical company. Lastly, to augment our management team and scientific advisory board—as we move along and become more advanced in what we are doing we expect to attract even better people.
Leslie Stone is an award-winning writer/editor with more than two decades of experience covering business, finance and lifestyle issues for newspapers, magazines and online publications. Originally from Virginia, she currently resides in the Orlando area.
Immunovative, Inc. – www.imun.com