These are not glamorous days for Dr. Stephen Keith. Early one recent morning, the new president of Antex Biologics Inc. battled traffic on the Capital Beltway as the sun rose, then lugged a computer from car to plane to Boston's subway before walking the last few blocks to his destination.
There, at the Maison Robert restaurant, Keith had about 20 minutes to pitch the Gaithersburg vaccine developer to a group of about 30 stockbrokers. When some heads nodded in understanding and no one broke early for the door, Keith scored the talk a success.
The daily victories can be modest at Antex, one company among scores of small, money-losing biotech firms struggling to survive. Many suffer their initial deficits in private. But Antex, publicly traded almost since its 1991 inception, provides a rare window into the financial challenges, and sometimes gut-wrenching decisions, nascent biotechnology companies face as they churn through cash for years before getting products to market.
At Antex, those decisions have included giving up rights to all its top vaccine candidates in exchange for cash from large pharmaceutical companies - a move that has since been largely reversed.
And during the spring, with the company just weeks away from running out of money, a desperate Antex raised $15.3 million with the help of a man convicted of securities fraud. As a result of the deal, entities associated with fallen biotech investing whiz David Blech now own 13.4 percent of Antex's shares. Company directors, fearing Antex would have to close, thought they had no other viable choice, a company filing with regulators says.
Antex's challenges are hardly behind it. Its stock is flat-lining near $3 a share on the American Stock Exchange, despite a recent 1-for-5 reverse split that cut its shares to 10.3 million. The $15.3 million had dwindled to $12.3 million by the end of September. At that rate, it will be gone in little more than a year. No Wall Street analysts follow the company. One of the few who stopped by lately was impressed by its science but shrugged off coverage for now.
"The problem is they are in very early stages of clinical trials," said Offutt Securities biotechnology industry analyst Vandana Bapna, voicing a common concern about young biotechs. "By the time the first vaccine goes to market, it could conceivably be five years."
Amid all this, however, Antex scientists have managed to generate six vaccine candidates owned solely by the company, including two in human testing - one for traveler's diarrhea and the other for ulcers. It has licensed five vaccines to pharmaceutical companies, and it has developed technology the company believes lays the foundation for a new class of antibiotics.
It all has been accomplished by a company that has never employed more than 35 people and has spent only about $36 million since its inception.
Significantly, Antex's top scientists largely have stayed put as the company has time and again neared the crisis point. Now, as Keith and Chief Executive Officer V. M. Esposito set out to raise more money, scientists such as James W. Jackson labor away in Antex's small, shiny labs. The uncertainty, Jackson said, is a fair trade-off for scientific freedom.
"Often, the big companies are looking for multibillion-dollar" products, said Jackson, who joined Antex in 1994 from a far larger firm. At Antex, products that address smaller but still significant health concerns will do for him.
"This is an entrepreneurial setting," Jackson said. "You keep your head down and your legs moving."
Antex has been in the financial hole from the start. The company was formed from a Gaithersburg subsidiary of Sweden-based BioCarb AB. The newly independent company, a vaccine developer known as MicroCarb, already had a lab and a dozen employees when Esposito heard about it at a presentation in 1991. He was intrigued despite its losses.
A rumpled former public health officer and National Institutes of Health scientist, Esposito, fueled by a desire to see research turned into products that could help people, had moved to private industry. Though still running Bethesda-based biotech company Theracel Corp., he agreed to consult with MicroCarb. In May 1992, he became chief executive officer.
With venture capitalists reluctant to invest in the company, Esposito netted $6.8 million by taking it public in December 1992. A series of other financings would follow, some coming just before the company was to run out of cash.
MicroCarb once raised $2.2 million by selling every centrifuge, piece of furniture and other fixed asset and then leasing them back. It licensed a protein it had discovered to Avenits Pasteur's predecessor, getting promises of cash.
Then, in January 1995, as MicroCarb executives scrambled to cobble together a private placement netting $2.7 million, the company slipped below the Nasdaq stock market's capital requirements and was delisted. MicroCarb moved to the less-visible over-the-counter Bulletin Board.