Biotech venture capital off to a $659m start in 2015

Just six days into 2015, the US biotechnology industry already is halfway to the $1.1bn in venture capital raised during the first three months of 2014, including a $48m Series B round for Global Blood Therapeutics (GBT), a $65m Series D for Seres Health and a $20m Series C for CytomX.

The three 6 January VC funding announcements were preceded by $76.4m in new financings for Aduro Biotech, Symic Biomedical and Clementia Pharmaceuticals on 5 January, all of which were upstaged by the $450m raised by Moderna Therapeutics – the largest single biotech venture funding round ever (scripintelligence.com, 6 January 2015). Even without another record-breaking deal in the first quarter of 2015, private US drug developers are well on their way to beating the first quarter 2014 venture capital total, which was the highest since 2008 (scripintelligence.com, 19 April 2014).

Global Blood eyes IPO

South San Francisco-based GBT will use its $48m in new capital primarily to fund clinical development of GBT440, an oral once-daily direct-acting sickle hemoglobin (HbS) modifier for chronic, prophylactic treatment of sickle cell disease (SCD).

The company will begin a Phase I/II clinical trial by the end of the first week of January, starting with dose selection in healthy volunteers and moving to SCD patients with the preferred dose. The goal is to generate proof-of-concept data by the second half of 2015.

Third Rock Ventures backed GBT's $40.7m Series A round in 2012, but the company's Series B round was funded largely by Wellington Management, RA Capital, Deerfield Management, Sabby Capital, an unnamed affiliate of the Cowen Group, Perceptive Life Sciences, and an unnamed "blue chip" investment fund (scripintelligence.com, 15 June 2012).

"The investors that just came into our round are all mezzanine investors [looking to support a future initial public offering]. Third Rock is the only venture capital investor," Global Blood CEO Ted Love told Scrip. "We expect to go public in the third or fourth quarter of this year on the strength of our proof-of-concept data."

GBT's venture cash will support the first clinical steps in a rapid development plan for GBT440 that could lead to a commercial launch for the sickle cell drug in 2018. Dr Love, who was executive vice president and head of research and development at Onyx Pharmaceuticals until the blood cancer drug company was acquired by Amgen in 2013, envisions a development path that's as rapid as the path to approval for Onyx's proteasome inhibitor Kyprolis (carfilzomib) for multiple myeloma.

Kyprolis was rapidly developed and approved in the US, because there was extensive knowledge of proteasome inhibition's effects in the multiple myeloma field. In SCD, Dr Love said, there's a similar vast pool of knowledge about the sickling effect on red blood cells (RBCs) when the cells become deoxygenated.

GBT440 binds to hemoglobin and increases hemoglobin's affinity for oxygen so that HbS does not polymerize and RBCs don't take on the sickle shape associated with SCD. If preclinical results for GBT440 are replicated in human studies, the drug could halt progression of the painful disease.

With successful Phase I/II results in hand, GBT hopes to convince the US FDA to agree to a mid-stage clinical trial that would be sufficient to support accelerated approval of GBT440 with a requirement that the mid-stage results are confirmed in a larger Phase III trial, as Onyx did with Kyprolis.

Diverse venture investments

While rare diseases, like sickle cell, and cancer always are hot areas of biotech investment, those aren't the only opportunities that garnered venture cash during the first few days of 2015. The table below highlights five other companies working in cancer, infectious disease, arthritis and orphan diseases that have raised private capital so far this year.

Company	Venture funding news	Use of proceeds
Seres Health; Cambridge, Massachusetts	Nestle Health Science, a wholly-owned subsidiary of Nestle, was the sole investor in a $65m Series D preferred stock financing. Seres previously raised $65m since its founding in 2010, including a recent $48m Series C round (scripintelligence.com, 3 December 2014).	The company is developing drugs that treat disease by restoring the function of a dysbiotic microbiome. Seres will use its Series C and D cash to push its lead drug candidate SER-109 into Phase III for prevention of the recurrence of clostridium difficile infection. The money also will be used to advance other drug candidates into the clinic, including programs in infectious, metabolic and inflammatory diseases.
Aduro Biotech; Berkeley, California	Eleven new investors funded Aduro's $51.4m Series D preferred stock financing, including OrbiMed, Janus Capital Management, funds managed by Franklin Advisers, Jennison Associates on behalf of certain clients, Foresite Capital Management, certain private investment funds advised by Clough Capital Partners, and other healthcare investors. The Morningside Group and other prior Aduro investors also supported the Series D round, which brought the company's total funding to date to $106.4m.	Aduro's new capital will fund ongoing development of the company's immuno-oncology pipeline, including a 240-patient Phase IIb clinical trial for CRS-207 in combination with GVAX Pancreas in the treatment of metastatic pancreatic cancer. CRS-207 is Aduro's lead drug candidate from a proprietary platform of live-attenuated double-deleted (LADD) Listeria monocytogenes strains that are engineered to initiate an innate immune response and drive an adaptive immune response. GVAX Pancreas comes from Aduro's vaccine platform. The LADD platform has been licensed to Johnson & Johnson's Janssen Biotech for prostate and lung cancers (scripintelligence.com, 30 May and 20 October 2014). Janssen also licensed GVAX for prostate cancer.
CytomX; South San Francisco, California	Pfizer Venture Investments led CytomX's $20m Series C round with participation from prior investors Third Rock Ventures, Canaan Partners and Roche Venture Fund. The Pfizer venture fund's parent company paid $25m up front plus preclinical financing and up to $610m in milestone fees in 2013 to partner with CytomX on the development of antibody-drug conjugates for cancer (scripintelligence.com, 6 June 2013).	CytomX is developing Probody therapeutics, which are antibodies that remain inert in healthy tissue, but are activated in the tumor microenvironment. CytomX will use its Series C funds for clinical development of Probodies and Probody-drug conjugates against cancer immunotherapy checkpoint targets. The company also will apply its Probody technology to bi-specific antibodies and engineered T cells. Bristol-Myers Squibb committed up to $1.2bn to CytomX in May under an immunotherapy agreement (scripintelligence.com, 28 May 2014).
Symic Biomedical; San Francisco, California	Lilly Ventures led a $15m Series A round that included investments by Den Danske Forskningsfond, Mitsui Global Investment, Ally Bridge Group, InCube Ventures, Purdue Foundry Investment Fund, Mission Bay Capital, QB3 Partners and individual investors.	Symic is developing compounds that function like proteoglycans, which are macromolecules native to the extracellular matrix (ECM). Symic's molecules function similarly to proteoglycans, which play a critical role in maintaining tissue function and healing upon injury or in chronic diseases. The company will use its Series A cash to take its two lead compounds into the clinic in acute and chronic diseases with unmet needs. Symic, which has raised $17.8m to date, also said it will collaborate with Nordic Bioscience in Denmark on the US company's osteoarthritis program. Nordic will provide development services in exchange for undisclosed service fees and equity, but Symic will retain development and commercialization responsibilities.
Clementia Pharmaceuticals; Montreal, Canada	Clementia added $10m to its Series A round, which now totals $32.5m, with additional investments by prior funders OrbiMed Advisors and BDC Venture Capital. The company also established a US subsidiary in Newton, Massachusetts.	The venture capital will fund Clementia's development of palovarotene, a retinoic acid receptor gamma agonist, for fibrodysplasia ossificans progressive (FOP). The compound is in Phase II development for FOP, a rare genetic disease characterized by episodes of soft tissue swelling and abnormal bone formation.