Big, Fat Biobucks – How Biotech Start-Ups Are Raking In Cash
You could be excused for thinking biotech is entering the summer doldrums. But those who took a few days off the grid will discover they’ve missed quite a bit. Money is continuing to flow like a river after a rainstorm: The median deal size in biopharma is now $42.8 million–almost triple where it was in 2013, according to a mid-year report by Silicon Valley Bank.
What kind of biomedical ventures are snapping up cash? Here are a few recent highlights.
Audentes Therapeutics
San Francisco-based Audentes Therapeutics, an aspiring developer of gene therapies for rare diseases, raised $75 million in an initial public offering this week. The price was $15 a share, and the stock climbed to $16.67 at 12:12 pm ET in its first session of trading. The company is working on gene therapies that seek to correct genetic disorders such as X-linked myotubular myopathy and Crigler-Najjar Syndrome. The company chose “BOLD” as its ticker, which not only sounds appropriately daring, but isn’t entirely pulled from thin air. It’s a play on its Latin-derived company name.
Fulcrum Therapeutics
Third Rock Ventures unveiled its latest startup this week with a $55 million Series A venture financing. Cambridge
, Mass.-based Fulcrum is led by Robert Gould, the former CEO of Epizyme , who led that biotech public company through its IPO in 2013. Gould is also a former director of novel therapeutics at the Broad Institute and was a scientific executive at Merck–completing the circuit from academia to Big Pharma to the startup world. This new venture, Fulcrum, is focusing on making small-molecule drugs that don’t necessarily interact with genes themselves, but interact with the regulatory switches that control how genes are turned on or off. This work is still in the early stages and a long way from reaching patients. But Fulcrum said in a statement that it has initially prioritized its research into fragile X syndrome and facioscapulohumeral muscular dystrophy–a pair of rare diseases that are thought to stem from a single gene mutation that throws off how genes are regulated.Oncorus
Fulcrum wasn’t the only Cambridge, Mass.-based biotech startup to rake in more than $50 million out of the gate. Oncorus pulled in $57 million in a Series A venture financing led by MPM Capital, and which included Deerfield Management, Arkin Bio Ventures, Celgene CELG +2.39%, Excelyrate Capital and Long March Investment Fund. The company is seeking to develop oncolytic viruses–which are supposed to migrate to cancer cells, get inside and cause them to burst. Oncolytic viruses are also thought to help recruit the immune system to mount a more aggressive attack against cancer cells, making this a subset of the burgeoning world of cancer immunotherapy. Oncorus is led by CEO Mitchell Finer, the former chief scientific officer of Bluebird Bio. The company said it has licensed certain intellectual property from Joseph Glorioso IIIand Paola Grandi at the University of Pittsburgh. The first priority is to go after an aggressive form of brain cancer–glioblastoma multiforme.
Jounce Therapeutics
Cambridge, Mass.-based Jounce didn’t tap the venture capital well this week, but it reached into even deeper pockets at Celgene, the biotech giant. Jounce secured a $225 million upfront cash payment, and a $36 million equity investment from Celgene. The big idea at Jounce, which I first wrote about in February 2013, is to make antibodies and other injectable protein drugs that can work in different ways to direct the immune system’s firepower against cancer. One of the big bugaboos about cancer immunotherapy is that scientists haven’t been able to figure out how to reliably select the patients upfront who are most likely to benefit from current therapies, and Jounce has been working hard on this part of the problem. As part of the deal, Celgene gets the option to co-develop Jounce’s lead drug candidate against ICOS, the inducible T-cell costimulation protein on the surface of T cells that many drugmakers believe is a promising target for drug development.
Synthorx
San Diego-based Synthorx raised a $10 million Series B venture financing. RA Capital Management led the deal and was joined by the company’s existing investors Avalon Ventures and Correlation Ventures. The big idea here is to insert amino acids that are synthetic–not found in nature–but with engineered properties that could help enhance certain biotech drugs. “The ability to incorporate synthetic or non-natural amino acids into proteins is not new,” said Andrew Levin, a managing director of RA Capital, in a company statement. “What we believe is new and truly groundbreaking about Synthorx’s technology is the ability to efficiently produce a variety of proteins containing multiple synthetic amino acids at the necessary scale and cost of goods for drug discovery and development.” The science underpinning the company in a May 2014 paper in Nature by Floyd Romesberg and colleagues at the Scripps Research Institute in San Diego.
