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The Alliance for Regenerative Medicine reported on 22 November that cell and gene therapy companies have raised enough money already in 2021 to break the record set in 2020. Venture capital financings are driving the surge with $8.2bn raised through the third quarter, which is up 45% from the same nine-month period last year.

Biopharmaceutical VC financings and initial public offerings already have broken records set in 2020 as of the end of the third quarter, so it is not surprising that a popular subsector of the industry is seeing similar dynamics. Cell and gene therapy companies raised $19.9bn through Q3, matching the amount raised in all four quarters of 2021, ARM said in its report based on financings tabulated by GlobalData. At least $1.5bn has been raised by regenerative medicine companies already in Q4.

In addition to venture capital financings, cell and gene therapy developers raised $4.7bn through IPOs, $3.3bn from follow-on public offerings, $1.5bn in private placements, $1.5bn through upfront payments from collaborators and $480m in mergers with special purpose acquisition corporations (SPACs).

Generate, Acelyrin, Chroma Lead Recent VC Deals

The three most recent biopharma VC mega-rounds did not involve cell or gene therapy companies, however. Generate Biomedicines led the trio of large venture capital financings with a $370m series B round announced on 18 November.

Generate is a Flagship Pioneering-founded company created to rapidly develop novel protein therapeutics – including antibodies, peptides, enzymes, cytokines and other previously undiscoverable proteins – that are more potent and have fewer side effects than existing therapies. The start-up’s artificial intelligence-powered technology platform combines machine learning at a large scale with wet lab research.

Cambridge, MA-based Generate’s series B round is the company’s first financing to include investors other than Flagship, which also participated in the round. A wholly-owned subsidiary of the Abu Dhabi Investment Authority, the Alaska Permanent Fund, Altitude Life Science Ventures, ARCH Venture Partners, Fidelity Management & Research Company LLC, Morningside Ventures, and funds and accounts advised by T. Rowe Price Associates, Inc. also participated.

Generate will scale up from 80 employees to 500 during the next two years as it advances multiple drug candidates toward investigational new drug (IND) filings. The company plans to have multiple programs in preclinical development by the end of this year and in the clinic by 2023.

Acelyrin, Inc., which came out of stealth mode in December with series A financing from Westlake Village BioPartners, also recently revealed a major mega-round when it announced on 16 November that it closed a $250m series B round. AyurMaya, an affiliated fund of Matrix Capital Management, Surveyor Capital (a Citadel Company) and Westlake led the series B round.

Los Angeles-based Acelyrin also announced that it licensed izokibep from Affibody AB under an agreement that gives the start-up to license additional molecules from Affibody. Izokibep is an antibody mimetic that inhibits interleukin-17A (IL-17A), which is designed to overcome limitations and improve on the efficacy of IL-17A-inhibiting monoclonal antibodies in the treatment of autoimmune diseases. Acelyrin is testing the candidate in a pivotal trial for the treatment of uveitis and a Phase IIb clinical trial for axial spondyloarthritis with plans for an additional Phase IIb study in hidradenitis suppurativa.

Izokibep is designed for subcutaneous injection rather than the intravenous administration required for the Novartis AG and Eli Lilly and Company blockbuster antibodies Cosentyx (secukinumab) and Taltz (ixekizumab), which both target IL-17A and are approved to treat psoriasis, psoriatic arthritis and axial spondyloarthritis. Acelyrin’s CEO Shao-Lee Lin has a lot of experience in autoimmune disease drug development, including as an executive at AbbVie Inc. where she oversaw development of the JAK inhibitor Rinvoq (upadacitinib) and IL-23 inhibitor Skyrizi (risankizumab).

In a third major VC deal, Chroma Medicine, Inc. launched on 17 November with $125m in financing, including a seed round backed by Atlas Venture and Newpath Partners, and a series A round led by Cormorant Asset Management, the seed investors and several new funders. The funding will be used to further develop Chroma’s epigenetic editing platform and to advance its pipeline of targeted therapeutics, which are designed to harness innate mechanisms and precisely control gene expression.

Chroma’s epigenetic editors can be programmed to turn genes on or off or alter the expression of several genes at once. Its platform is supported by the recent acquisition of Epsilen Bio, which is working in partnership with the San Raffaele Telethon Institute for Gene Therapy. Cambridge, MA-based Chroma is also collaborating with Massachusetts General Hospital and the University of California San Francisco.

In other recent venture capital financings:

In Brief:

A quick roundup of smaller venture capital financings:

  • Fountain Therapeutics said on 18 November that it raised $15m in series A-2 financing, bringing its series A round total to $26m, to finance its pipeline-building efforts in degenerative diseases.

  • BAKX Therapeutics Inc., which entered into a collaboration with Ipsen SA in July worth of up to $852m, announced on 18 November that it raised a $25m series A round to fund its development of cancer drugs targeting the BAK and BAX proteins. (Ipsen Buys Into BAX Inhibitor Targeting Certain Cancers)

  • Mekonos, Inc., a developer of cell therapies on a chip, revealed a $25m series A round on 9 November.

  • Deka Biosciences, Inc. said on 16 November that it closed a $20m series A round to fund its development of novel cytokine therapies for cancer and inflammatory diseases.

  • Valo Therapeutics Oy, which is developing novel, adaptable immunotherapy platforms for cancer and infectious diseases, revealed an €11m ($12.75m) pre-IPO funding round on 15 November.

  • Cancer-focused Treadwell Therapeutics, Inc. said on 18 November that it will fund clinical development for three novel small molecules and preclinical development of its biologics and cell therapy platform with $91m in series B financing from a round led by Sino Biopharmaceutical Limited and 3W Fund Management Limited. Treadwell, operating from New York and Hong Kong, launched in July 2019 and announced $27m in seed financing in early 2020. (Finance Watch 2019 Ended With NearRecord VC Financings But Some Slowing Expected In 2020) The company’s clinical stage programs include CFI-402411, an immunomodulatory kinase inhibitor with activity toward HPK1, which is being tested in advanced solid tumors as a monotherapy and in combination with pembrolizumab; the PLK4 kinase inhibitor CFI-40095 that is being tested in leukemia as a monotherapy and in combination with decitabine or azacitidine; and the TTK inhibitor CFI-402257 that will soon begin testing in patients with metastatic estrogen receptor-positive breast cancer. The first candidate from Treadwell’s biologic and cell therapy pipeline is expected to enter the clinic in early 2023. 

  • Ncardia, which provides stem cell-based technologies for drug discovery firms and cell therapy developers, announced on 16 November that it has raised more than $60m through a strategic partnership with Kiniciti, an investment platform focused on strengthening the cell and gene therapy ecosystem globally. Kiniciti is backed by the private equity firm Welsh, Carson, Anderson & Stowe and Biospring Partners; it now has a controlling stake in Ncardia and its platform for contract research, development and manufacturing of induced pluripotent stem cell (iPSC)-based solutions. Its capabilities include manufacturing of iPSC-derived cells, assay development, disease modeling and cell-based screening.

  • Waltham, MA-based Avilar Therapeutics launched on 18 November with $60m in seed financing from founding investor RA Capital Management to create a novel class of protein degrader therapeutics. Avilar’s ASGPR Targeting Chimeras (ATACs) are designed to target disease-causing extracellular proteins in a wide range of diseases. The platform is differentiated from initial protein degrader technologies that target intracellular proteins. The company explained that ATACs harness a natural process through which endogenous proteins are internalized into hepatocytes via the asialoglycoprotein receptor (ASGPR) and degraded. ATACs are bi-functional molecules that comprise a ligand that binds to a target protein, which is conjugated to a second ligand that binds to ASGPR. RA Capital previously has invested in several companies with degraders that target intracellular proteins, including Arvinas, Inc., C4 Therapeutics, Inc., Frontier Medicines Corp. and Vividion Therapeutics, Inc..

  • Recludix Pharma in San Diego launched on 15 November with $60m in series A financing for its platform for the discovery and development of SH2 domain inhibitors in the treatment of cancer and inflammatory diseases. Its first three oral small molecules target STAT3, STAT6 and an undisclosed non-STAT target by inhibiting their SH2 domains. Recludix believes that it will be able to develop more effective and better tolerated therapies than existing, less selective JAK/STAT inhibitors.

  • San Diego-based Protego Biopharma, Inc. announced a $51m series A round co-led by Lightspeed Venture Partners, Vida Ventures and MPM Capital on 17 November. Protego is a preclinical-stage company focused on novel treatments for diseases caused by protein misfolding. Scripps Research Institute professor Jeffery Kelly, a pioneer in protein misfolding research, is a co-founder of the start-up. Kelly’s research provided the foundation for FoldRx Pharmaceuticals, which was acquired by Pfizer Inc. in 2010 and was the original developer of the big pharma’s amyloidosis drug Vyndaquel (tafamidis). (Pfizer to bolster rare disease portfolio with FoldRx acquisition) Protego is developing small molecules with its Pharmacological Chaperone platform and its Unfolded Protein Response platform for stress-responsive signaling pathway modulators to treat various systemic amyloid diseases, such as light chain amyloidosis, and genetic protein misfolding diseases that cause myopathy, cardiomyopathy, stroke, renal disease, retinal diseases, channelopathies and various degenerative diseases.

  • Ankyra Therapeutics said on 12 November that it closed a $45m series B round to take its lead drug candidate, ANK-101, through IND-enabling studies and into Phase I clinical trials. Boston-based Ankyra also will use its funding to advance additional cytokine programs. The company’s therapies are designed to expand the therapeutic window of immune-modulating cytokine drugs by forming an extended drug depot following intratumoral administration.

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