Halifax biopharma company Appili Therapeutics has raised about $16.9 million to fund Canadian trials of influenza drug Favipiravir, which is owned by Japanese photography and biotech giant FUJIFILM Toyama Chemical Company.

The private placement comes in the wake of Appili’s $10.25 million raise in February of this year and is part of a surge in bioscience fundraising in Atlantic Canada.

Both Appili’s February fundraising and the more recent round have seen the company sell shares and warrants on the TSX Venture exchange. The $16.9 million included $15.5 million worth of publicly sold shares, as well as $1.4 million of investment from the firms that helped organize the sale of the shares. Appili shares closed up 3 cents to $1.13 – a 61 percent year-to-date increase.

“In terms of the overall ecosystem, I think this is going to be extremely positive for the company itself,” said Scott Moffitt, executive director of the Nova Scotia life sciences industry association BioNova. “And it’s certainly going to bring a lot of notoriety back to the capabilities that we have in this part of the world.”

The private placement was led by Bloom Burton Securities Inc., which is affiliated with the Bloom Burton investment group, which has backed Appili from its launch. The other financial groups involved in the deal were Mackie Research Capital Corporation, Industrial Alliance Securities Inc., Haywood Securities Inc., and Richardson GMP Ltd.

Favipiravir is a broad-spectrum antiviral that is already approved for use in Japan under the name Avigan. In 2014, Japanese health authorities told FUJIFILM to stockpile it in case of a pandemic.

Chinese research dating back to February has also shown that Favipiravir has “antiviral properties against SARS-CoV-2,” the virus that causes COVID-19, in unborn babies. And in March, The Guardian reported that small-scale trials suggested the drug could decrease patients’ median recovery time from 11 days to four days.

“Appili was built to solve infectious disease problems, and we believe that Favipiravir will be an important part of the arsenal that ultimately addresses this coronavirus pandemic,” said Appili CEO Armand Balboni in a statement. “With the continued support from the investment community, the results of this fundraise bolsters our capacity to push forward our Phase 2 program, which is designed to address a critical unmet need for the most vulnerable COVID-19 patients.”

The Canadian trials will be held in long-term care homes in Ontario, and will include both patients and staff. Unlike the Chinese trials, the drug will be tested as a prophylactic -- a pharmaceutical that prevents a condition, rather than just treating it.

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The Appili funding is part of a surge in biotech investment in Atlantic Canada. According to BioNova, $62 million of funding has been publicly announced by life sciences companies so far in 2020.

Much of this-year’s activity has been spurred by companies pivoting to address the Coronavirus pandemic.

Dartmouth drug-discovery company IMV is in the process of developing a SARS-CoV-2 vaccine. Its shares, which trade on the TSX and Nasdaq exchanges, are unchanged from January but have risen by about a third from $2.94 on March 13, to $3.89 when markets closed on Wednesday.

In May, IMV raised $25.1 million through private sales of shares and warrants, which has extended its runway through 2021.

Halifax’s Sona Nanotech, meanwhile, has received a $4.1 million grant from NGen, Canada's advanced manufacturing supercluster to help it develop a COVID-19 rapid testing kit. 

Moffitt said that the quality of the local startup ecosystem has been key to facilitating companies’ COVID-19 pivot.

“Oftentimes, people don’t necessarily think of Atlantic Canada and Nova Scotia as having a strong health and life sciences sector,” he said. “But I think that what you’re seeing around the COVID-19 response is just stuff that we see every day with the quality of the research and the stuff that’s being done here.”

He also added that he expects coronavirus-related startup realignments to produce lasting changes in the ecosystem.

“We’ve dealt with SARS, and MERS, and now we’re on to COVID-19. So I don’t see this as going away over the long-term,” he said. “I think we will need to be better prepared and able to respond to these kinds of things… I think these kinds of focus opportunities are going to continue to be there and we are going to need to focus on them.”