Mass High Tech

Juliet Marine Systems Inc., Portsmouth, N.H., developer of the GHOST stealth littoral defense ship, has taken in $9.67 million in the company’s first institutional funding round, according to an SEC filing.

The document filed with the U.S. Securities and Exchange Commission shows that there were four backers in the funding round for Juliet Marine, although they are not named. Listed as related persons are company directors Kevin Kinsella of Avalon Ventures and former Sen. John E. Sununu, along with a pair of retired Rear Admirals – Rear Admiral Jay M. Cohen and Rear Admiral Thomas E. Richards.

The GHOST operates on the surface with waterfoils partially under, but does so without having to deal with drag from the water that slows down normal boats. Supposedly the GHOST uses a principle called supercavitation, which means a water vapor bubble big enough to encompass the two tubular floats at the end of its wing-like waterfoils is created at speed, cutting the drag by a factor of 900, the company claims. This same principle is used in super-fast torpedoes currently in use by various navies around the world.

While the company announced its existence in August, in January it put out another release touting its potential use as a weapon system that could keep the Straits of Hormuz open, should Iran attempt its threatened oil blockade.

Juliet Marine CEO Gregory Sancoff was not available for comment when called Thursday.

AnaptysBio’s proprietary SHM-XEL platform, which couples fully human antibody libraries with in vitro somatic hypermutation (SHM) in mammalian cells to generate high affinity lead candidates, replicates key features of the human immune system and overcomes limitations of prior antibody technologies.  By harnessing the natural mechanism of antibody maturation under controlled conditions, SHM-XEL allows for the selection of optimal antibody properties such as high affinity, functionality, cross-reactivity and epitope diversity.  The use of mammalian cell display permits AnaptysBio to optimize manufacturing-related parameters by selecting for high-level expression and stability in parallel.  Simultaneous secretion of antibody variants by the mammalian cells utilized during SHM-XEL also permits incorporation of functional assays in the antibody discovery process.   Key hallmarks of the SHM-XEL platform were recently published by AnaptysBio in Proceedings of the National Academy of Sciences (PNAS (2011), 108, 20455-20460).

“Our technology platform provides an integrated approach to antibody discovery using the natural biochemistry of somatic hypermutation in the context of mammalian cells,” said Hamza Suria, president and chief executive officer for AnaptysBio. “We will continue to generate differentiated therapeutic candidates for our internal pipeline and under strategic alliances with select pharmaceutical partners.”

About AnaptysBio

 Founded in 2005, AnaptysBio, Inc. is a privately-held company focused on the generation of antibody therapeutics, and the leader in the use of somatic hypermutation (SHM) for antibody discovery and optimization. SHM is the body’s natural process for generating potent antibodies. The Company’s SHM-XEL platform couples SHM with mammalian cell display to generate antibodies for therapeutic applications through an iterative process of natural evolution and high-throughput selection under controlled conditions – a process that has been referred to as “naturalizing” antibodies. This versatile platform can be used for both discovery of new antibodies and optimization of existing antibodies to generate candidates with desired properties for therapeutic applications. AnaptysBio has established broad intellectual property around the use of SHM and is currently building a pipeline of novel therapeutic antibody product candidates. Major investors in AnaptysBio include founding investor Avalon Ventures, as well as Alloy Ventures, Frazier Healthcare Ventures, and Novo A/S. For more information, visit www.anaptysbio.com.

By: Bruce V. Bigelow

The sale of Amira Pharmaceuticals will likely go down as one of the standout life sciences deals of 2011—it certainly ranks as one of the biggest payouts in San Diego, where Amira was founded in 2005.

But what may be more significant than hitting the bell in the strongman game at the biotech carnival is the way Amira approached the deal—and how the buyout has opened the way to an intriguing new business model for life sciences startups.

Luke already has explained how Amira beat the odds when New York’s Bristol-Myers Squibb (NYSE: BMY) agreed in July to pay $325 million in upfront cash, and another $150 million in anticipated milestone payments. It’s unusual these days when a big pharmaceutical writes a check that big for a six-year-old startup whose lead drug candidate has barely completed early stage trials.

Amira also kept some other drug candidates out of the deal. Some went to a new San Diego biotech called Panmira Pharmaceuticals, which is continuing the development work under CEO Hari Kumar, who was previously Amira’s chief business officer. Another important program, which was the focus of a partnership Amira had with GlaxoSmithKline (GSK), was spun into a new standalone company.

In other words, Amira worked to find a good home for every important drug in its pipeline. This doesn’t happen in many buyouts, as the acquiring pharmaceutical company is often interested in one or two drugs in development, and the rest get relegated to the “no more resources” pile.

Since then, Amira co-founder (and San Diego Xconomist) Peppi Prasit has raised the curtain on another life sciences startup, Inception Sciences, which was conceived as a kind of mothership for spinning out new drugs. The idea was to create an incubator-type holding company that would enable Amira’s drug discovery group to hatch new drug development programs. Prasit, Jilly Evans, and John Hutchinson, who were the scientific founders of Amira, would lead the effort to identify new pathways as well as potential drug compounds for these new targets.

Under this new business model, each group of new drug candidates would be organized as a separate development program within different business entities. For venture firms, investing would be like ordering from the à la carte menu, giving investors an equity stake in a specific drug program—without the general and administrative baggage that typically goes with a biotech acquisition. As the drug candidates of each program advance to clinical studies, the business entity could be packaged for sale to big Pharma or retained by Inception Sciences.

The new model is at least partly the result of a push at Menlo Park, CA-based Versant Ventures, to find new ways to start and fund life sciences startups, according to Clare Ozawa, an associate at Versant Ventures who recently joined Inception Sciences as chief business officer.

“We really are an operating company built around a drug-hunting team,” Ozawa says. Before starting Amira, she says Prasit, Evans, and Hutchinson had worked together at Merck on the successful development of montelukast sodium (Singulair), the drug used to treat asthma and seasonal allergies that generates $4 billion a year in revenue.

“They are an exceptional drug discovery group with extraordinary drug-hunting capabilities,” Ozawa says. “They are particularly good at pouncing on biological insights that are important in new disease areas.”

The concept of building a company around a core discovery group goes against the grain for most institutional investors, at least nowadays, according to Panmira’s Kumar. Before Inception Sciences, Kumar says, “No one in their right mind considered a ‘discovery engine’ as a bankable investment.” It would take too much time and money to reach the later stages of development, when a drug’s value becomes better established.

Ozawa says Versant’s Brad Bolzon was willing to help bankroll Inception Sciences, especially after it became clear that Bristol-Myers Squibb would acquire Amira. Because the buyout was so big, Ozawa says investing in Panmira became kind of a freebie—akin to leaving a few chips on the table after claiming your winnings.

Prasit’s team also was widely respected. The same group had been successful in developing new drug compounds at both Amira and Merck, according to Kevin Kinsella of San Diego’s Avalon Ventures. “They’ve had more success developing effective, non-toxic, high PK [pharmacokinetics], nano-molar binding drugs and new chemical entities than I’ve seen anywhere else in 30 years in this business,” says Kinsella, whose firm also invested in Amira.

But the formation of Inception Sciences as a discovery engine is really only part of a more holistic story, according to Kumar. He says Amira began taking a comprehensive approach to spinning out its different drug development programs at least 18 months before the Bristol-Myers Squibb buyout was announced.

When Prasit, Evans, and Hutchinson came together to start Amira in 2005, Kumar says the research group was basically starting from scratch, with “almost no intellectual property.” Within a few years, Amira’s R&D group had identified a number of promising anti-inflammatory compounds with the potential to become new drugs.

The first was a series of small molecule drugs that blocked a signaling pathway called DP2/CRTH2, which increases allergic inflammation when activated. The compounds showed promise as a new treatment for respiratory diseases, such as asthma, chronic obstructive pulmonary disease, and other allergic conditions.

Another group became known as the FLAP compounds because they inhibited 5-Lipoxygenase Activating Protein¬ (FLAP), a signaling process that helps control inflammation. In early 2008, Amira formed a partnership with GlaxoSmithKline (worth as much as $425 million) to develop and commercialize FLAP compounds for treating respiratory and cardiovascular disease.

To Ozawa, the R&D team’s most impressive success came after scientists at Harvard Medical School published a seminal paper in early 2008 that linked LPA-1, a biological signaling process, to idiopathic pulmonary fibrosis (IPF), a rare disease that forms scar-like tissue in the lungs and drastically reduces the ability to breathe. In less than a year, Amira had done preclinical proof-of-concept studies for at least two molecules that blocked receptors in the LPA-1 pathway. By early 2011, Amira had completed early safety and tolerability studies of its lead drug candidate.

“They were extremely effective and fast in taking it to Phase 1,” Ozawa says, “and the results were encouraging enough to entice Bristol-Myers Squibb to acquire the company.”

In the meantime, the company had been wrestling with a dilemma. As Prasit’s team came forward with each new potential drug compound, Kumar says, “We went to the board and said if we do another Big Pharma partnership, we’ll always be caught in this vicious cycle of invent-partner, invent-partner.”

This was the issue that set Amira and its board on the road to a more comprehensive approach. “A theme of discussion that began in the second quarter of 2010 was, ‘What is Amira going to look like five years from now?’” Kumar says. “It became very clear to us that the idea of a pure research and discovery group does not have much of a chance to survive in the real world. We had to find a return for investors.”

The situation “made Peppi think about what would happen to the research group,” Kumar says. “So Peppi said, ‘Let me think about this.’”

In terms of selling Amira, Kumar says, the good news was that Bristol-Myer Squibb wasn’t the only prospective buyer at the table, which gave Amira some negotiating leverage. Even better, Bristol-Myer Squibb was interested only in Amira and its LPA-1 program.

So, as the buyout talks progressed, Amira formed Panmira Pharmaceuticals as a way to continue the development of its two drug candidates from Amira’s DP2/CRTH2 program, as well as a FLAP compound for topical treatment of the eye and a preclinical program known as 5-lipoxygenase (5-LO). Most of the work under the original FLAP agreement was being done at GSK, so Amira formed a separate new company to simply manage that relationship.

To some outsiders, the departure of Prasit, Evans, and Hutchinson from Amira in November, 2010, was something of a shock. But that also was part of the plan, as the group set out to form Inception Sciences. The Bristol-Myers Squibb deal did not affect the formation of Inception, which Kumar describes as “a very proactive decision.”

As for Panmira, Kumar says Amira’s venture investors hold essentially the same proportional shares in Panmira. It hasn’t been necessary to raise any new money, he adds, as funding from the FLAP deal with GSK continues to fuel Panmira’s operations.

Today, Ozawa says Inception Sciences has about 25 employees and operates like a kind of internal contract research organization for two programs that have been seeded by Versant. Inception 1 is focused on drug discovery for neurodegenerative diseases and Inception 2 is hunting for metabolically targeted drugs designed to cut off a tumor’s fuel supply.

Inception 3 will likely be launched in 2012. So far, Ozawa does not see funding as a problem. “I do think one of the advantages for Inception is the track record of creating very important drug compounds in a time frame that is very important to the industry,” she says.

Syndax Pharmaceuticals, Inc., a late-stage epigenetics oncology company, announced today that members of management will present at the following upcoming fall conferences:

• BIO Investor Forum, San Francisco, CA, October 25 at 1:30 PM PT
• 9th International Discovery on Target, Panel Discussion: HDACi and Their Progress in the Clinic, Boston, MA, November 3, 10:40 AM ET
• Lazard Annual Healthcare Conference, New York, NY, November 16, 1:30 PM ET
• Life Sciences Summit, New York, NY, November 17, 4:15 PM ET  

Syndax Pharmaceuticals, Inc. is a Waltham, MA-based, late-stage, oncology-focused pharmaceutical company. The company is building a portfolio of new oncology products to extend and improve the lives of patients by developing and commercializing novel cancer therapies in optimized, mechanistically driven combination regimens. Syndax has worldwide rights to develop and commercialize entinostat which has shown promise in randomized clinical trials in solid tumors. Syndax is backed by top-tier Venture Capital firms: Domain Associates, MPM Capital, Avalon, Pappas and Forward Ventures. Formed in 2005, Syndax’s intellectual property is based on work from scientific founder Ronald Evans, Ph.D., recipient of the 2004 Albert Lasker Prize for Basic Medical Research, a Member of the National Academy of Sciences, a professor at the Salk Institute for Biological Studies and a Howard Hughes Medical Institute Investigator.     For more information please visit www.syndax.com.

BusinessWire

Team will advance SHM-XEL^TM antibody platform to build therapeutic pipeline

AnaptysBio, Inc., a privately-held therapeutic antibody company, today announced that Carol G. Gallagher has joined its board of directors as Executive Chair. In addition, AnaptysBio has promoted Hamza Suria to chief business officer and acting chief executive officer, and David J. King to chief scientific officer.

As an industry veteran, Gallagher brings extensive leadership experience to the advancement of AnaptysBio’s SHM-XEL platform and therapeutic pipeline. She joins AnaptysBio after serving as CEO of Calistoga Pharmaceuticals, which was acquired by Gilead Sciences earlier this year. Prior to Calistoga, she served as president and CEO of Metastatix, senior vice president of corporate development at Anadys Pharmaceuticals and vice president of product planning at CancerVax. Beginning in 2002, Gallagher led the Rituxan collaboration and oncology marketing at Biogen Idec. She also led oncology and ophthalmology global marketing planning at Pfizer, joining Pfizer through the acquisition of Warner Lambert and Agouron Pharmaceuticals.

Suria, who joined AnaptysBio in December 2008, will continue to lead AnaptysBio’s corporate development efforts as chief business officer in addition to functioning as acting CEO. Prior to AnaptysBio, Suria was at Maxygen, where he was responsible for partnering and alliance management of next-generation protein therapeutics with Roche, Sanofi-Aventis, Bayer, Astellas and others. Before Maxygen, he was responsible for business development at Diabetogen Biosciences and Viron Therapeutics. Suria holds a B.Sc. in biochemistry from Kalamazoo College, an M.S. in immunology from the University of Western Ontario and an Executive MBA from the Richard Ivey School of Business.

King, who joined AnaptysBio in November 2008, will continue to lead all research and development efforts at AnaptysBio as chief scientific officer. Prior to AnaptysBio, King was at Medarex, where he was involved in the design and selection of therapeutic antibodies, and led the development of a new class of antibody-drug conjugates. He is an established expert in antibody engineering and antibody therapeutics and has been involved in the design and development of three FDA-approved antibody products and several other clinical stage antibodies. At Celltech in the United Kingdom, where he worked for 14 years, he was the lead inventor of Cimzia®, a PEGylated antibody fragment for therapy of autoimmune diseases and was involved in the design and development of Mylotarg®, an antibody-drug conjugate for therapy of acute myeloid leukemia. Prior to joining Medarex, King was at Coulter Pharmaceuticals, later acquired by Corixa, where he was part of the team which successfully refiled the BLA for Bexxar®, a radiolabelled antibody for therapy of non-Hodgkin’s lymphoma. King received his B.S. from the University of Warwick and his Ph.D. from the University of Surrey in the U.K., and was a Glaxo Group Research postdoctoral fellow.

About AnaptysBio

Founded in 2005, AnaptysBio, Inc. is a privately-held company focused on the generation of antibody therapeutics, and the leader in the use of somatic hypermutation (SHM) for antibody discovery and optimization. SHM is the body’s natural process for generating potent antibodies. The Company’s SHM-XEL™ platform couples SHM with mammalian cell display to generate antibodies for therapeutic applications through an iterative process of natural evolution and high-throughput selection under controlled conditions – a process that has been referred to as “naturalizing” antibodies. This versatile platform can be used for both discovery of new antibodies and optimization of existing antibodies to generate candidates with desired properties for therapeutic applications. AnaptysBio has established broad intellectual property around the use of SHM, and is currently building a pipeline of novel therapeutic antibody product candidates. Major investors in AnaptysBio include founding investor Avalon Ventures, as well as Alloy Ventures, Frazier Healthcare Ventures, and Novo A/S. For more information, visit www.anaptysbio.com.

Successful completion of first year milestones demonstrates applicability of SHM platform to biodefense applications

SAN DIEGO–(BUSINESS WIRE)–AnaptysBio, Inc., a privately-held therapeutic antibody company, today announced that the Defense Advanced Research Projects Agency (DARPA) has extended its contract with AnaptysBio to generate additional high affinity thermally stable antibodies for biodefense applications. This extension was awarded based upon the successful completion by AnaptysBio of milestones during the first year of the contract.

“We are pleased to extend our contractual relationship with DARPA”

Originally signed in 2010, AnaptysBio’s contract with DARPA, a U.S. Department of Defense agency, is focused upon generating antibodies that could be used in antibody-based biosensors to detect bioterror threats.

AnaptysBio’s proprietary SHM-XEL platform uniquely permits optimization of multiple properties, including thermal stability, expression, cross-reactivity and functional activity, in parallel with affinity improvement using the natural process of somatic hypermutation (SHM). Aside from biodefense applications, SHM-XEL is useful in improving the convenience and shelf-life of therapeutic antibodies through increased thermal stability.

“We are pleased to extend our contractual relationship with DARPA,” said James Topper, executive chairman of AnaptysBio. “The milestones achieved under this project demonstrate our ability to simultaneously optimize Abs for affinity and thermal stability.”

About AnaptysBio

Founded in 2005, AnaptysBio, Inc. is a privately-held company focused on the generation of antibody therapeutics, and the leader in the use of somatic hypermutation (SHM) for antibody discovery and optimization. SHM is the body’s natural process for generating potent antibodies. The Company’s SHM-XEL™ platform couples SHM with mammalian cell display to generate antibodies for therapeutic applications through an iterative process of natural evolution and high-throughput selection under controlled conditions – a process that has been referred to as “naturalizing” antibodies. This versatile platform can be used for both discovery of new antibodies and optimization of existing antibodies to generate candidates with desired properties for therapeutic applications. AnaptysBio has established broad intellectual property around the use of SHM, and is currently building a pipeline of novel therapeutic antibody product candidates. Major investors in AnaptysBio include founding investor Avalon Ventures, as well as Alloy Ventures, Frazier Healthcare Ventures, and Novo A/S. For more information, visit www.anaptysbio.com.

By Donna Goodison 

TechStars is now a more enriching experience for start-ups.

The 14-week accelerator and seed-stage investment program will start offering each participating company an additional $100,000 in funding in the form of a convertible debt note. That’s on top of the $18,000 that TechStars gives to each company in return for a 6 percent equity stake.

The new funding will come from $24 million contributed by venture capital firms, TechStars alumni and private individuals. A convertible debt note converts to company stock at a later date.

“If you get into TechStars, it means that you immediately have the backing of a very broad venture community,” said David Cohen, founder and CEO. “In Boston, there are a large number of seed venture funds and individual angels that back TechStars, and this just extends that.”

The VC firms contributing the money are Newton-based SoftBank Capital, DFJ Mercury, Foundry Group, IA Ventures, Right Side Capital Management, Silicon Valley Bank, RRE Ventures and Avalon Ventures, which has a Cambridge office.

The additional funding will allow TechStars companies to focus on making progress with their products or services instead of spending time on early fund-raising, according to Cohen.

He also expects to attract a broader range of start-ups to TechStars, which provides free office space and mentoring at its programs in Cambridge, Boulder, New York City and Seattle.

“It’s obviously a lot more attractive because it’s more money upfront as soon as you get into the program,” Cohen said. “I think it will also attract entrepreneurs at a different stage of their life,” including those with a family and a mortgage.

The funding also will be offered to the 10 start-ups accepted into the inaugural TechStars Cloud, a new accelerator for companies working exclusively on cloud computing, cloud infrastructure and OpenStack. That program will run from January to April in San Antonio, Texas.

By: Susan London

SAN FRANCISCO – Entinostat, a novel oral histone deacetylase inhibitor taken once weekly, may overcome resistance to hormonal therapy in breast cancer, the results of a randomized phase-II trial suggest.Investigators studied 130 women with estrogen receptor–positive advanced breast cancer progressing on aromatase inhibitor (AI) therapy. Results showed that, compared with exemestane (Aromasin) plus placebo, exemestane plus entinostat reduced the risk of progression-free survival events by 27% and the risk of death by 44%. It also was well tolerated.

“The combination … is delaying the time to disease progression, allowing patients to maintain hormonal therapy longer, and delaying the need for change of therapy and subsequent considerations of chemotherapy,” principal investigator Dr. Denise A. Yardley reported at a breast cancer symposium sponsored by the American Society of Clinical Oncology.

“These results support our plans for a global, pivotal phase-III study due to begin enrollment in 2012,” added Dr. Yardley, an oncologist with the Sarah Cannon Research Institute and Tennessee Oncology PLLC, both in Nashville.

In an additional finding, median progression-free survival was greatest, 8.5 months, in patients treated with the combination who had hyperacetylation of proteins in blood cells during the first cycle of treatment, suggesting that this could be a biomarker for efficacy. These data reveal “for the first time in a matched controlled trial, evidence of hyperacetylation from an HDAC [histone deacetylase] inhibitor correlating with improved outcomes,” she noted.

Session chair Dr. Joyce O’Shaughnessy, an oncologist with the Baylor Sammons Cancer Center in Dallas, Texas Oncology, and US Oncology, characterized the trial’s findings as “very, very promising,” saying, “I agree that it’s time for a phase III” trial. To her knowledge, this is the first randomized trial of an HDAC inhibitor in breast cancer.

A particularly impressive finding was the long progression-free survival seen in hyperacetylators, according to Dr. O’Shaughnessy. It will be important to determine whether this correlates with toxicity, as lack of toxicity might then identify patients who could benefit from dose-escalation of entinostat. “They need to really carefully look at that because you really want to optimize it for all the people in the phase-III trial,” she commented.

Giving some mechanistic background to the trial, Dr. Yardley noted that HDAC inhibitors interfere with the condensation of chromatin and the silencing of genes, such as tumor suppressor genes.

Resistance to AIs occurs from upregulation and activation of growth factor signaling pathways that are not estrogen dependent. “Entinostat targets these growth factor signaling pathways, ultimately inhibiting tumor cell growth,” she explained. Preclinical data also suggest that the drug resensitizes tumors to AIs.

The randomized phase-II trial, called ENCORE 301 (Entinostat Combinations Overcoming Resistance), was conducted among women in North America, the European Union, and Russia who were postmenopausal and had locally advanced or metastatic estrogen receptor–positive breast cancer that was progressing on a nonsteroidal AI (anastrozole or letrozole). Those with metastatic disease could have received up to one prior chemotherapy for metastases.

The patients were randomized in balanced fashion to double-blind treatment with exemestane plus placebo or exemestane plus entinostat. By study design, P values less than .1 were considered statistically significant.

Demographically, the patients were 62 years old on average. Eighty-five percent had experienced progression on an AI in the metastatic setting.

With a median follow-up of 18 months, entinostat was associated with longer median progression-free survival (4.28 vs. 2.27 months; hazard ratio, 0.73; P = .06), with similar findings in subgroups stratified by locally advanced vs. metastatic disease, age, and site of metastasis, Dr. Yardley reported.

In 49 patients, blood samples collected before and during the first cycle of therapy were analyzed to determine the percent change of lysines in peripheral blood mononuclear cell proteins that were acetylated. Results showed that progression-free survival was greatest, at 8.54 months, among entinostat-treated patients who had hyperacetylation, defined as an above-median percent change in lysines that were acetylated during the first cycle of treatment.

These findings “suggest that entinostat-induced hyperacetylation appeared to track with improved outcomes in these patients and suggest quite provocatively within the very first cycle of treatment that this may be a potential marker to assess the benefit from this treatment,” said Dr. Yardley.

Furthermore, the association raises the “question, if you can identify early on a group that is not acetylating, whether increasing the dose may get them to be hyperacetylators and derive more benefit from the HDAC inhibitor,” she said. Additionally, ongoing analyses are looking at whether hyperacetylation correlated with toxicity and could then be used as a surrogate for efficacy.

“We are going to have more correlative work planned as a part of the phase-III trial that is coming up,” Dr. Yardley added.

In an analysis that was exploratory because follow-up is still short, entinostat was also associated with better overall survival (26.9 vs. 20.3 months; HR, 0.56; P = .027). Additional data with longer follow-up will be reported at the San Antonio Breast Cancer Symposium later this year.

The combination of entinostat and exemestane was well tolerated, with no unexpected safety signals. The most common grade 3/4 adverse events in the entinostat group were fatigue (13%), neutropenia (13%), nausea (5%), and vomiting (5%). The rate of discontinuation because of adverse events was 1% in the placebo group and 11% in the entinostat group.

Dr. Yardley reported that she had no relevant conflicts of interest. Syndax Pharmaceuticals, developer of entinostat, was not among Dr. O’Shaughnessy’s disclosures.

By Erin Chambers Smith

Where do you go after starting San Diego’s fasting growing company, then selling it for millions? If you’re 26 at the time, like Jon Carder was in 2006 when he sold online loan comparison site ClientShop, you head to Indonesia to surf and mellow out. And then the drive and ambition that afforded you such leisure creeps in, and you get antsy.

“I was bored after a month,” remembers Carder.

The Point Loma Nazarene grad was soon back in San Diego and on his way to serial entrepreneurialism. His next venture, MojoPages (a pre-Yelp version of online yellow pages with user reviews) is still alive and ticking, but it’s his latest company, restaurant loyalty club MOGL, which launched in April, that has investors buzzing. And spending. Carder recently secured $2.4 million in venture capital from Avalon Ventures and is in the midst of another $10 million round of fundraising.  

MOGL is an online club that pays back its users for eating at partner restaurants and bars. Give MOGL your credit card information, and whenever you use that card at any number of participating restaurants and bars (spots from Sammy’s Woodfired Pizza to Poseiden have signed up), you automatically get 10 percent of your bill credited back to your card. A smart grab at the recession sensitive wallets of consumers? Sure. An alternative to the super-saturated online coupon market? Definitely. A new way to use and improve credit-card tracking technology? That, too.

But Carder says there’s more to the formula that’s attracting consumers so quickly. For one, MOGL donates one meal to Feeding America for every bill closed by a MOGL user. Carder says it’s about tapping into other ways to motivate people. Not everyone gets off the couch to save 10 percent. Feed the hungry at the same time, and you’ve reached a new segment of the population. “I was learning about intrinsic ways to motivate my employees and then I started studying the psychology of it more,” says Carder.

Gaming is another psychological tool he’s applied to the loyalty program. A portion of every MOGL user’s tab is added to a jackpot. If at the end of the month you have spent the most money at that establishment, you win the jackpot (becoming the “MOGL”). “Becoming a MOGL at a venue is thrilling to those who like their name up in lights,” says Carder.

 Feedback from restaurant owners is mostly positive. “I love that I can finally reward my regulars in a way that really makes them feel good about eating here so often,” said Mina Desiderio, owner of The Local in the Gaslamp. “From punch cards to wine clubs, loyalty programs haven’t changed much in the last 30 years. We’re innovating in that space,” says Carder, whose internal research shows MOGL users spend 120 percent more on average than other customers.

“We’re all about profitability for restaurants. It has to be profitable for the restaurant community,” says Carder.

The company has grown from 50 restaurants signed up to 120 currently participating. The user base has grown from zero to more than six thousand since April. “I’ve had fast growth in companies before, but never like this,” he says.

Aside from a minor glitch at the get-go with getting people paid quickly enough (apparently banks can’t move money as fast as MOGL can track their credit card purchases), the biggest challenge has been something every online idea faces: copycats. Carder has a team of attorneys working to patent his intrinsic motivation theory. But other than that, there’s nothing proprietary about the business. His best attempt at staving off the competitors? Keep growing; go national. Get all the restaurants and bars signed up and keep them happy. “There are 950,000 restaurants in the country and 85 percent of Americans dine out once per month,” he says. “That’s huge potential for this business.”

MOGL has already launched in Los Angeles and Orange County. And while Carder says he is committed to keeping the company headquartered in San Diego, if the $10 million round of funding comes through, he’s thinking big for his next expansion market: New York City.