Bactana featured in Animal Pharm
By Joseph Harvey
Published: 29 March 2017 10:14 AM
Connecticut-based start-up Bactana Animal Health is developing a nutritional product platform designed to improve microbiome health in livestock and other animals. The company’s chief executive John Kallassy told Animal Pharm’s editor Joseph Harvey about the firm’s links with Cornell University and its attempts to cross the innovation chasm in animal health.
John Kallassy initially became interested in the animal health sector in 2013 when he was working in an advisory role with Jaguar Animal Health in his capacity as a licensed investment banker.
Soon after, he left the banking world behind, joining Jaguar as chief operating officer and chief financial officer where he helped launch its initial public offering in 2015.
Jaguar conducted a number of its clinical trials at Cornell University – where Mr Kallassy (pictured left) received his MBA. During this time, he met Dr Rodrigo Bicalho.
A professor at Cornell’s College of Veterinary Medicine, Dr Bicalho is described by Mr Kallassy as “one of the world’s leading cattle microbiome experts”.
“The more I learned about the findings and technology that Dr Bicalho and his research team at Cornell were developing, the more I realized their innovations were extraordinary and better than anything I’d seen on the market in animal health,” he told Animal Pharm.
Bactana is developing products using this patented technology exclusively licensed from Cornell. The firm is working on its FPS-4 product platform, which is based on years of research at Cornell, and peer-reviewed research published in December 2015 relating to the company’s novel bacteria isolates.
FPS-4 is based on a naturally-occurring collection of ‘pioneer gut colonizers’ selected from the Faecalibacterium prausnitzii bacteria species initially identified by Cornell for use in food-producing animals.
After the technology was licenced out in July 2016, Mr Kallassy teamed up with Dr Bicalho to self-fund and incorporate Bactana. Cornell continues to hold an undisclosed equity stake in Bactana.
Microbiome benefits in animals
For several years, Dr Bicalho (pictured below) and Cornell researchers had been investigating healthy and unhealthy microflora in calves through in vitro and in vivo studies. Through this work, the university identified a unique collection of previously undiscovered beneficial bacteria strains in calves and pigs.
In turn, this lead to the isolation of four particular strains of bacteria – two from pigs and two from cattle.
Mr Kallassy said the FPS-4 bacteria isolates are beneficial in improving weight gain, gut health, production yield and feed efficacy. Additionally, the strains can help reduce mortality and health management costs. He also pointed out Bactana’s product platform could be used to develop other alternatives to antibiotics and hormones.
Using cattle-specific bacteria, Cornell conducted a field trial with 554 calves and multiple endpoints. The results of the trial – published in December 2015 – revealed a 13% growth increase in pre-weaning calves, a 47% reduction in scours and a 66% decrease in mortality rates amongst calves with severe diarrhea.
Mr Kallassy noted: “In dairy calves, around 20% suffer from diarrhea and about 5% of all diary calves die from this condition. With the current focus on antibiotic reduction in the US and throughout most of the world, I wouldn’t be surprised if these incidence rates increase.”
He also pointed out Cornell’s research showed calves treated only at birth with its FPS-4 based bacteria isolates yielded more milk per day during their first lactation, compared to the control group in the field trial.
“When animals are born, the microbiome is relatively naked,” explained Mr Kallassy. “The Cornell research demonstrated that if we can affect the microbiome at birth, then it sets up a healthier microbiome at least until the calf’s first lactation. There’s other evidence this benefit can last for the entire life of the animal.”
Natural microbiome imprinting ‘home run’
Mr Kallassy said Bactana – a pioneer in “microbiome imprinting” – is developing a new class of nutritional products and potentially new drugs for animal health.
“Our expertise is in the cattle industry,” he pointed out. “But we also see a tremendous market for our FPS-4 platform in swine, poultry and potentially even human health.”
He added: “Most probiotics available on the market today have little proof of efficacy. There really is not much out there to support the benefits of the existing pool of probiotics. This is bad for farmers and good for Bactana.”
Mr Kallassy said consumers are also driving the reduction for non-antibiotic alternatives in animal health: “If you go to the grocery store and count the number of antibiotic-free and hormone-free milk products there are. Then if you could go back a few years and count them, there’d be a huge difference. This tells us something”
“If we can continue demonstrating alternate ways of increasing growth and decreasing diseases in a natural, safe and sustainable way, then we’ve got a home run.”
Bactana is in ongoing discussions with possible corporate collaborative partners, which will aid the firm in achieving approval for its FPS-4 platform and isolates and provide sales know-how to the firm as well.
The company has a strong patent portfolio and is currently evaluating whether to use the FPS-4 product platform for nutritional product development, veterinary drug approvals, or both – a choice its prospective partners are providing guidance on.
Bactana’s current plan is to launch its first nutritional product for calves in the US “in early 2018” and begin testing FPS-4-derived products for swine, poultry, and even companion animals soon thereafter.
Funding and manufacturing
Bactana has already overcome some notable obstacles. The company is able to successfully manufacture small, shelf stable, pilot-level batches of their fastidious bacteria isolates in a freeze-dry form.
It has also sealed its first round of funding. Mr Kallassy said the undisclosed amount would help the firm to achieve some more critical milestones, such as completing additional studies using the FPS-4 product platform, hiring personnel, establishing commercial manufacturing capabilities and preparing for an initial global product launch.
Investors featured in the round include Connecticut Innovations, New York-based Sustainable Income Capital Management and a number of private backers.
Mr Kallassy said Bactana is aiming to focus on investors who understand the agricultural sector in the US – a “growing pool”, he suggested. The firm’s next financing – an equity round – is pencilled in to close in June or July this year.
The company will now focus on conducting additional clinical trials to evaluate additional end points such as optimal dosing, efficacy and mechanism of action, as well as growing its patent portfolio.
Bactana is also expanding its R&D capacity to perform additional studies of swine, beef, and poultry, where it expects similar benefits from the FPS-4 product platform.
In fact, Bactana is not the only animal health firm to attract funding for microbiome engineering R&D. Last year, Californian company EpiBiome secured $1 million in debt financing from Silicon Valley Bank. The firm previously secured $6m of investment in a series A funding round.
Across the chasm
With experience of managing several successful start-ups across a number of sectors, Mr Kallassy gave his perspective on innovation in the animal health space.
“The animal health industry has its roots in large human pharma and much of the innovation it saw was from human health and based on out-dated compounds. This human to animal trend created an innovation chasm. I really think this chasm is starting to close.
“In 1952 Pfizer opened its ag division and began research on Oxytetracycline for livestock, eventually leading to the mega Zoetis IPO in 2013. This helped catapult animal health as its own industry. Since then there has been a slew of pure-play animal health IPO’s, private investments, and M&A activity.
“We’re talking to some of the big animal health companies and for some it really is a case of old habits dying slowly. They’re all excited about innovation but they’re not necessarily operating on the same time horizon as Bactana.
“Change has to happen and it will happen. I really do feel we are in the right place at the right time.”