August 8, 2016
Building Bioscience

Dual CEO Almassian tees up CaroGen's next stage

PHOTO | Steve Laschever
PHOTO | Steve Laschever
After decades in the biotech industry, Bijan Almassian is leading the charge to raise millions of dollars for Farmington vaccine maker CaroGen.
PHOTO | Steve Laschever
Bijan Almassian is seen in CaroGenís UConn incubator lab with research scientist Marie Krady (left) and research associate Lorraine Apuzzo (center), who is pursuing her doctorate at UConn.
Susan Froshauer, CEO, CURE
Kevin Crowley, Managing Director of Investments, CI

With decades of biotech industry experience under his belt, Bijan Almassian may be approaching one of his most significant career milestones yet: Raising millions of dollars for a startup he co-founded, which is developing a vaccine platform to treat multiple deadly viruses and other conditions, including Hepatitis B.

Almassian is CEO of Farmington-based CaroGen, which the 63-year-old Iranian native said is close to securing the first $2 million of what could be an $8 million series A investment.

If he raises the money, CaroGen plans to conduct more tests that will allow it to enter a phase 1 clinical trial for its Hepatitis B vaccine within the next two years.

A trial would also be a key milestone — one that would cost millions of dollars to complete — that could bring CaroGen's vaccine closer to market and make the company more attractive to investors and potential suitors, such as major pharma developers.

Almassian, who has worked at seven companies in positions ranging from a chemist to CEO, said leading a startup biotech to something bigger has been one of his biggest career goals.

"I work harder now than when I was in my 30s and 40s," Almassian said during an interview at CaroGen's laboratory at UConn Health's Farmington Technology Incubation Program (TIP) facility. "As a scientist, I've had a huge drive to have an impact on something major and worldwide."

The first target for CaroGen's vaccine platform is chronic Hepatitis B, which infects liver cells and can lead to deadly cancer and cirrhosis. A vaccine exists to prevent the virus, but many people don't receive it, and there is no vaccine or other cure for the already infected.

CaroGen's therapeutic vaccine hopes to provide that cure to help the estimated 240 million people worldwide suffering from Hepatitis B. But the company does face competition: Gilead already has a Hepatitis B vaccine in human trials.

CaroGen's vaccine platform is based on virus-like vesicle (VLV) technology.

It's a hybrid of two types of unrelated animal viruses: A live virus-based vaccine, like what's used to make the Measles, Mumps and Rubella vaccine, and an inactivated or "killed" virus, like the one used to produce the common influenza vaccine, said CaroGen Scientific Chairman John Rose, a Yale professor who developed the technology.

See related story: Yale's next vaccine platform

CaroGen said those two viruses rarely cause human infection, so most patients won't be carrying antibodies inside them that could make the vaccine less effective.

Since setting up its lab at UConn in early 2015, CaroGen has inked partnership agreements with scientists there to tackle other ailments as well including the digestive tract bacteria C. difficile, colorectal cancer and Zika virus. It also has relationships at Yale, where Rose runs a laboratory.

CaroGen has raised about $800,000 since launching in 2012, the bulk of it from the Connecticut Bioscience Innovation Fund and its pre-seed fund, which are overseen by Connecticut Innovations, the state's quasi-public venture arm. But to get to phase 1 clinical trials for its Hepatitis B vaccine, it's going to need a lot more capital.

As of press time, Almassian said he was close to securing $1 million from CI and another $1 million from an unnamed Chinese investor, who may kick in another $6 million later.

If the fundraising round happens, CI would see its existing $650,000 investment in CaroGen converted to additional equity.

Kevin Crowley, CI's managing director of investments who has been working with CaroGen for several years, said the promise of the fledgling company and its leader is multifold.

"[Almassian] is a repeat entrepreneur with experience," Crowley said. "It's a Yale technology. He's taken advantage of the pre-seed program leveraged [bioscience fund] money, and here we are in discussions about the possibility of series A to bring this technology to the masses and possibly help with Hepatitis B and other [diseases]."

Future aspirations

Almassian said CaroGen runs a lean operation, with an annual cash burn of approximately $250,000. Like many startups, management and advisors have taken equity stakes in exchange for their work.

Almassian said CaroGen has already been approached with buyout offers (he thinks the company could fetch as much as $5 million from a suitor), but he's rejected them, not interested in making a quick profit.

Instead, he and his team dream of building a major Connecticut biotech company, like New Haven's Alexion Pharmaceuticals. That could take years, and the odds are typically stacked against early-stage biotechs.

"Biotech is high-risk, high-reward and the percentage of failure is extremely high," Almassian said.

But despite that, his optimism is obvious. He said CaroGen isn't rushing its development process and wants to perform all the necessary tests before diving into a phase 1 clinical trial.

"That gives us a high level of confidence we have a better chance," he said. "I'd be lying if I said it was a sure thing."

He's also emboldened by the makeup of his board of directors, which includes Susan Froshauer, a Harvard-trained microbiologist and molecular geneticist who raised millions of dollars as CEO of Rib-X Pharmaceuticals (now Melinta Therapeutics Inc.), which she left in 2010. Today, she leads the state's biotech industry association CURE.

Froshauer said she's been familiar with Rose's research for decades and her admiration for him is part of what spurred her to join CaroGen's board.

As for Almassian, Froshauer described him as a great networker and collaborator, and she gives him credit for keeping a strong team together with relatively few financial resources. Trying to raise money can be frustrating, Froshauer said, but she has found Almassian to be persistent.

If CaroGen is ultimately able to help procure a blockbuster drug, Almassian says he wants to use his proceeds to reinvest in biotechnology and give to charity. And in the statistically more likely scenario that he doesn't strike gold, he said he's still happy to improve science.

"Any additional data we generate, even if we don't take it to the market, I think it's an improvement," he said.

Dual focus

While Almassian's core focus is CaroGen, he is also co-founder of Aria Neurosciences, which was created in 2010 and controls a patent related to a treatment for Alzheimer's disease.

Almassian's name is on that patent, along with several other researchers. He helped develop the technology during his time at a New Jersey biotech company called Exsar, where he held his first CEO role, from 2005 to 2010. Exsar closed in 2012.

The company's founder granted Almassian the rights to the technology when he left, he said.

"[Aria's] on a slower pace because I've shifted more of my time to CaroGen, which I feel has a lot of promise," Almassian said.

In addition, he said investors view Alzheimer's treatments as riskier bets. Aria is going to need a good CEO to navigate those waters and Almassian intends to hire one after CaroGen completes its pending investment.

Almassian said Aria has promising technology and a good team. For example, its board contains Harry Penner Jr., a personal mentor to Almassian who is a longtime biotech exec who co-founded seven companies, including Rib-X along with Froshauer.

Reflecting on a painful rejection

Almassian recalls being interested in medicine at a young age, when he lived in Iran. He moved to Boston in the late 1970s, where he earned his doctorate in medicinal chemistry. Today, he has two grown sons and lives with his wife in Cheshire.

Almassian said he spent much of his professional life striving to be a CEO, a goal he achieved when he became chief executive of Exsar.

"I had a passion to really run an operation and build a company from scratch," he said.

He's had jobs as a chemist, drug developer and chief operating officer — where he learned to work with investors — at companies spanning geographically from Connecticut to California.

While Exsar was his first CEO gig, he had a shot at a leadership position in Connecticut three years earlier — but things went badly, ending in a lawsuit. The matter nearly soured Almassian on the Nutmeg State for good.

In 2002, Penner tapped Almassian as COO for a Yale spin-off called AlexiPharma, which was trying to raise $10 million to get a pain treatment into clinical trials. Almassian says he was promised the CEO job if he could help the company hit funding milestones. He was also excited to be mentored by Penner.

One of the first steps was trying to secure $500,000 from a Connecticut Innovations bioscience seed fund.

But according to a lawsuit Almassian filed in 2003 against a CI official, Carolyn Kahn, who oversaw the fund at the time, Kahn told Penner that she didn't think Almassian had the right mix of business, science and negotiation skills necessary to lead AlexiPharma.

"I was just devastated because I've never been rejected before if you look at my career," Almassian said, looking back on the 13-year-old case. "It hurt."

Almassian's suit against Kahn alleged, among other things, that Kahn was biased against him because he is a Muslim.

Kahn, who left CI soon after the suit, denied the allegations, saying she had no idea Almassian was Muslim and that she had merely performed due diligence on a potential portfolio company's prospects and the business qualifications of its leadership, according to court documents.

Kahn's attorneys convinced a federal judge to throw out the discrimination charge, and the judge remanded the remaining allegations — which included contractual interference and infliction of emotional distress — to state court. But there is no record of the case proceeding any further.

Attempts to reach Kahn, who moved to California after her time at CI, were unsuccessful for this story.

After the rejection, Penner urged Almassian to stay with the company, but Almassian — who said he never faulted Penner for what happened — quit and took a job at a Maryland company called Panacea.

"I really wanted to get out of the state of Connecticut," he said. "It was a bad experience after that."

But he returned seven years later to launch Aria and work for CaroGen.

Looking back, Almassian said he always felt confident in his abilities, despite the rejection. Still, he feels his leadership skills are more polished today.

The past legal spat with a top-ranking CI exec doesn't appear to have hurt Almassian's image in the long run.

Asked about the suit, Crowley, CI's current managing director of investments, said of Almassian: "I think our existing investments are a testament that we believe in him."

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