A veteran biopharma executive tries to fund his own product — and sees firsthand how hard it is

After two decades as an executive at well-known drug companies, he’s used to navigating the ups and downs of raising money on the public market.

But Greg Mayes has never faced a fundraising challenge like this before.

Galvanized by his teenage son’s epilepsy diagnosis, Mayes started a new company to try to shepherd a promising inhaler technology for epilepsy through a key clinical trial. Now, he’s racing against the clock to convince venture capital firms and private investors to help him move forward. He needs a total of $21 million by the end of this month — and he still has a third of the way to go.

Mayes’s quest has sent him crisscrossing the country over the past year for meetings with investors and scientists. He’s spent countless hours working the phone and making his pitch over Skype. He put up a six-figure sum of his own money to front his startup, Engage Therapeutics, and he plans to invest another six-figure sum. And it’s not at all clear if that will be enough.

Raising this Series A round, he said, “is harder than I expected.”

Mayes is billing his treatment as a would-be EpiPen for epilepsy, a way for patients to stop a seizure in its tracks when they feel one coming on. (He estimates there are about 200,000 such patients in the U.S. who can recognize early warning signs minutes or days before they have a seizure but don’t have any very fast-acting options to prevent it.)

He envisions another market, too — patients who’ve already had one seizure but want to prevent a second one, or those like his son Conner who can generally prevent seizures with daily medication but keep a backup on hand.

Mayes’s treatment, called Staccato alprazolam, combines two approved products: The generic type of benzodiazepine best known by the brand name Xanax. And to deliver it, an inhaler approved in 2012 to deliver an antipsychotic medication.

The inhaler works instantaneously: As a patient inhales, a heat source inside the inhaler vaporizes a thin film of the drug, which then cools and condenses into particles that are drawn into the lungs.

The inhaler’s original developer is Alexza Pharmaceuticals, a Bay Area company that’s now wholly owned by a Barcelona company called Ferrer. Alexza’s now exploring whether the inhaler could be used to treat a slew of other conditions, such as testing whether it could deliver fentanyl to alleviate pain in cancer patients or deliver a sleep drug to people who wake up in the middle of the night.

Then there’s epilepsy — Alexza has given Mayes the option to license development rights, because the company was moved by his enthusiasm, Alexza chief operating officer Tatjana Naranda said. In exchange, Alexza will get milestone and royalty payments down the road. The licensing deal with Alexza is why Mayes has a deadline at the end of August to line up investors for his Series A round: Alexza wants to get the inhaler into the clinic soon for epilepsy, and if Mayes can’t bring together enough investor money, Alexza could reassess its plans.

Making it happen when options are few

Mayes is well-liked among his peers in biopharma, known for his can-do attitude, technical know-how, and stubborn persistence in getting things done.

He has “an undying commitment to making this happen,” said Michael Bailey, a friend and former colleague who’s known Mayes for years and is now CEO of AVEO Oncology (AVEO).

Mayes trained as a lawyer and has spent his career climbing the corporate ladder, focusing on oncology programs at big companies including AstraZeneca (AZN) and an Eli Lilly (LLY) subsidiary. Then his son Conner was diagnosed with epilepsy in 2014.

Driven to find better options for Conner and others like him, Mayes started studying epilepsy on nights and weekends. He began asking around about the most promising options in the pipeline that needed a boost.

Those conversations led him to Staccato alprazolam, which he learned was showing early hints that it might be able to quickly stop a seizure.

In a proof-of-concept study sponsored by Alexza, researchers flashed lights to induce seizures in five patients with an uncommon form of epilepsy that can be triggered in this manner.

When patients used an inhaler filled with different dosages of the drug, they had lower average levels of seizure activity, compared to when they used an inhaler filled with a placebo. The drug seemed to start showing an effect within 30 seconds. In four of the patients, seizure activity was no longer detectable just two minutes after they inhaled certain dosages of the drug — and the protection seemed to last for hours.

The researchers presented their study at a neurology meeting in April and are now working on getting it submitted to a scientific journal.

Dr. Ronald Lesser, a neurologist at Johns Hopkins who specializes in epilepsy and is not involved in the development of the inhaled treatment, cautioned against deriving too much significance from the study. The inhaled treatment hasn’t been tested yet in patients who are having real, unprovoked seizures, the way they would in real life. And, Lesser emphasized, the study didn’t assess whether the inhaled treatment is better than existing options: Whether it would stop more seizures, or stop them in more people, or be just as easy to use.

The number of Americans with epilepsy reached 3.4 million in 2015, according to new data from the Centers for Disease Control and Prevention. Individual seizures typically last no longer than a few minutes.

Whether or not they can control their seizures, patients usually keep a so-called “rescue medication” close by, in case a seizure happens. They have a few options available, but none are ideal.

A gel sold as Diastat is the only out-of-hospital treatment approved by the Food and Drug Administration, but it takes half an hour or more to start working, and because it must be administered in the rectum by a caregiver or clinician, it can be embarrassing and logistically complicated.

Doctors also prescribe off-label options, usually benzodiazepines that can be taken as a pill, a nasal spray, or a liquid under the tongue. But these have their drawbacks, too: They can be slow to start working, and they often leave patients too sleepy to go back to work or school.

Staccato alprazolam could also face fierce competition from other new options on the way targeting similar patients, said Dr. Matthew Luedke, a neurologist at Duke who specializes in epilepsy and is not involved in the development of the inhaled treatment. Companies in San Diego and the United Kingdom are each developing formulations of different sedative drugs administered through the nose.

And as with other benzodiazepines, Luedke said he’s concerned about the potential for abuse with Staccato alprazolam.

But at the end of the day, “Would I like to see more alternatives than Diastat?” Luedke said. “Yeah, definitely.”

Approaching wary investors

Mayes made the leap to quit his C-suite biopharma job at the end of last year. That decision was partly set into motion nearly a year ago over lunch at a Turkish restaurant in Manhattan with Dr. Jacqueline French, a neurologist who runs New York University’s clinical trials for epilepsy.

French, who led the proof of concept study on Staccato alprazolam, was excited about the inhaled treatment’s potential. But she also warned Mayes that commercializing it would be tough.

She was right.

At Engage, which is based in the same New Jersey suburb of New York City where Mayes lives, he has only one fellow employee. He hasn’t taken a paycheck since last year.

And many of the investors Mayes has approached have been wary.

Mayes is trying to sell them on funding a Phase 2b clinical trial, which will enroll about 100 patients with uncontrolled seizures who will stay in an in-patient setting for up to about a week. They’ll be given an inhaler with either different dosages of the active drug or the placebo, and will be monitored for how long their seizure lasts.

Mayes anticipates that the $21 million he needs will be enough to take the company through the end of 2019, with the Phase 2b study finished, analyzed, and presented to the FDA for feedback. If that study succeeds, Mayes tells investors, the company might fund its next trial by raising a Series B round, going public, or trying to get acquired by a larger company.

Potential investors haven’t been shy in telling Mayes about their concerns.

One worried that the inhaled treatment might cause problems in patients with respiratory conditions like asthma, Mayes said — a concern he tried to assuage by saying that the researchers could perhaps collect data in those patients to test whether it was safe, or they could contraindicate the treatment entirely in those patients.

Other investors worried about the risk involved in the complicated logistics of its subsequent study, which will be need to be conducted in the real world, where seizures can’t as easily be measured. Mayes’s solution: Towards the end of the planned Phase 2b study, some of the patients will be allowed to take the inhaled treatment home with them to help Engage design the real-world study.

Sometimes the personal connections to epilepsy can help win over investors. Investor Warren Lammert, who’s one of Engage’s board members, is investing through his generalist fund Granite Point Capital as well as with his personal funds. He said he got involved not only because he thought Engage is a strong business proposition, but also because his 20-year-old daughter has epilepsy.

French, who will run the planned Phase 2b study, said she has done more than 20 phone calls with potential investors. (French has been a consultant for Engage, Alexza, and other companies developing products for epilepsy; these companies pay a nonprofit she’s set up to covers a static fraction of her NYU salary in an effort to minimize conflict of interest.)

She’s helped win over a few investors. But success stories like Lammert have been the exception.

“I would describe the experience as frustrating because I so would have thought that other people would have seen the potential benefit here,” French said. “And it’s so frustrating that people don’t.”

Good news to sway investors

Mayes, whose public relations representative approached STAT about this story, said he decided to talk openly about his experience to raise the curtain on the ups and downs that aren’t captured in the usual embargoed press releases announcing a Series A round.

In an interview earlier this month, Mayes was candid about the challenge before him: He was only about halfway to the $25 million he needed to raise to move forward. And he had just over three weeks to do it.

He vowed not to quit. But he also acknowledged that if August ends and he still hasn’t reached the $25 million mark, “there’s a good chance that this whole thing blows up — it’s sad.”

He added: “There’s a very realistic chance that this program does not go forward.”

But just a few days later, the tide had turned.

He’d won over another big investor — expanding his base of committed investors to two major venture capital funds, three smaller funds, and about a dozen high net worth individuals. He also managed to renegotiate the terms of his deal with Alexza, reducing by $4 million the total he must raise by the end of this month. Together, the two pieces of good news gave him new fuel to try to sway investors still on the fence.

“What we tell people is: We’re cautiously optimistic we can get this done, but it’s not a done deal,” he said.

He went to Boston this week for two more meetings.