Venture Funding Deals: Atreca Raises $125m To Advance Solid Tumor Candidate

Derived from Strategic Transactions, Informa’s premium source for tracking life sciences deal activity, the Venture Funding Deals column provides a comprehensive monthly review of emerging biopharmaceutical companies that have received venture funding. This month’s column covers deals announced August and September.

AbCellera Secures $10m Series A Investment

AbCellera Biologics Inc. raised $10m in its Series A financing round led by DCVC Bio, which adds 2 board seats. (Sep.)

Founded in 2012 based on microfluidic single-cell technology from the University of British Columbia, the company offers a high-throughput single B-cell screening platform and repertoire sequencing technologies for the discovery of large data sets of antibody sequences. AbCellera plans to use the funds to grow its therapeutic antibody discovery business and double-down on its partnerships. The company has already entered into 30 such partnerships over its life with large pharma including GlaxoSmithKline PLC, Teva Pharmaceutical Industries Ltd., Pfizer Inc., and Merck & Co. Inc.

Allogene Raises $120m Through Private Debt Round

Allogene Therapeutics Inc., which was formed in April around off-the-shelf chimeric antigen receptor T-cell programs from
Pfizer Inc., raised $120m through the sale of convertible notes to primarily first-time investors. Perceptive Advisors led and was joined by Deerfield Management, Fidelity Management and Research, Franklin Templeton Investments, Jennison Associates, Surveyor Capital, funds and accounts advised by T. Rowe Price Associates, the University of California Office of the Chief Investment Officer, venBio Select Advisor, and undisclosed large mutual funds. Cowen was the placement agent. Allogene recently raised $300m through its Series A round that closed in April. It launched a $324m IPO on Oct. 10. (Also see "Finance Watch: With The Year's Biggest IPO, CFO Says Allogene Is Ready To Go 'Full Throttle'" - Scrip, 11 Oct, 2018.) (Sep.) 

Atreca Raises $125m Through Series C Round

Cancer immunotherapies developer Atreca Inc. raised $125m through an oversubscribed Series C round from investors including returning backers Wellington Management and Cormorant Asset Management and new investors Aisling Capital, Boxer Capital (Tavistock), EcoR1 Capital, Redmile Group, Samsara BioCapital, and funds managed by Tekla Capital Management. Proceeds will help the company advance its lead candidate ATR101 into clinical trials for solid tumors including breast, lung, and colon cancers. (Sep.)

Series B Round Brings In £35.5m For Evox

Evox Therapeutics Ltd. closed a £35.5m ($45.4m) Series B round led by Redmile Group. New investors GV, Cowen Healthcare Investments, Panacea Healthcare Venture, Borealis Ventures, and other private investors also participated along with returning backers Oxford Sciences Innovation and Oxford University Innovation (University of Oxford's tech transfer arm). The company will use the proceeds for continued development of its exosome-based therapeutics pipeline, including the advancement of rare disease programs into the clinic. Since its 2016 inception, Evox has raised £45.5m. It is working on engineered exosomes to enable drug delivery across the blood-brain barrier, intracellular delivery of biologics, and extra-hepatic delivery of RNA therapeutics. (Sep.)

Fulcrum Therapeutics Closes $80m Series B

Genetic disease-focused Fulcrum Therapeutics Inc. raised $80m in its Series B financing led by Foresite Capital, which adds a board member and was joined by Fidelity, 6 Dimensions Capital, Casdin Capital, Sanofi Ventures, Section 32, NS Investments, entities affiliated with Leerink Partners and undisclosed institutional investors. According to the Form D filing, a total of 20 investors participated. Fulcrum will use the funds to move its lead compound for facioscapulohumeral muscular dystrophy into the clinic, and to advance other pipeline programs for orphan genetically-based neuromuscular, central nervous system, and hematologic disorders. A company executive said it could file for its IPO next year. (Sep.)

Galera Therapeutics Closes $70.2m Series C Round

Galera Therapeutics Inc., which is developing cancer treatments that target oxygen metabolic pathways, raised $70.2m through its Series C round. New investor Clarus led (and takes a board seat) and was joined by other first-time buyers Adage Capital Management, HBM Healthcare Investments, Nan Fung Life Sciences, RA Capital, Rock Springs Capital, and Tekla Capital Management. Returning backers Correlation Ventures, Galera Angels, New Enterprise Associates, Novartis Venture Fund, Novo Ventures, and Sofinnova Ventures also took part. Galera will use the Series C proceeds, together with funds from a concurrent $80m royalty financing with Clarus, to support continued development of GC4419 for severe oral mucositis in head and neck cancer patients. (Sep.)

Clarus Provides Galera With $80m Through Royalty Financing

Cancer drug developer Galera Therapeutics Inc. entered an $80m royalty financing agreement with Clarus (which also participated in Galera's concurrent $70m Series C round). Under the royalty financing, Clarus will receive single-digit royalties on future sales of GC4419, currently in Phase II for severe oral mucositis in patients with head and neck cancer, and a related compound until the total royalty amount equals an undisclosed multiple of the original $80m payment. (Sep.)

HLS Enters Debt Agreement With Silicon Valley Bank

HLS Therapeutics Inc. entered into a $100m senior secured term loan and $25m senior secured revolver with Silicon Valley Bank. The company will use the proceeds to refinance existing debt and for working capital. Its focus is specialty pharmaceuticals with a focus on cardiovascular and central nervous system conditions. (Sep.)

Immune-Onc Raises $33m In Series B Round

Immune-Onc Therapeutics Inc. raised over $33m in its Series B round from investors including Northern Light Venture Capital, Vivo Capital, and the Stanford-StartX Fund. The company is studying the tumor microenvironment and immune suppressive pathways in its development of immuno-oncology therapies, and will use the Series B proceeds to advance its early-stage pipeline of candidates for blood and solid cancers. (Sep.)

Series C Lands $55m For Jacobio

Chinese start-up Jacobio Pharmaceuticals Co. Ltd. raised $55m in its Series C financing led by Qiming Capital and Hillhouse Capital led the round, which also included Prudence Investment Management. (Aug.) 

The three-year-old firm will use the proceeds to move its preclinical JAB3000 cancer program into the clinic and for other pipeline development. Jacobio’s lead asset is Phase I JAB3068 for advanced solid tumors. It has 13 preclinical compounds of which 12 are aimed at cancer and the other is targeting infectious disease.

KSQ Raises $80m In Series C Round

KSQ Therapeutics raised $80m through its Series C round from new investors Baillie Gifford, Cowen Healthcare Investments, Invus, and Lilly Asia Ventures, along with returning backers Flagship Pioneering, Polaris Partners, Arch Venture Partners, and Alexandria Equities. The company has used its CRISPRomics drug discovery platform to advance 12 drug discovery projects in three oncology areas, and will use the Series C funds to bring the first candidate into the clinic, in addition to initiating IND-enabling studies on three others. (Sep.)

Minoryx Closes €21.3m Series B Round

Minoryx Therapeutics SL, focused on orphan CNS diseases, closed a €21.3m ($25m) Series B round led by Fund+, which was joined by new backers SFPI-FPIM, SRIW, and Sambrinvest, in addition to all returning Series A investors: Ysios Capital, Kurma Partners, Roche Venture Fund, Idinvest Partners, Chiesi Ventures, Caixa Capital Risc, and HealthEquity. Fund+ and SRIW both added board members. The company will use the funding to conduct a new clinical trial for a second orphan CNS indication for lead compound MIN102. An oral selective PPAR gamma agonist, MIN102 is already in a Phase II/III trial for adrenomyeloneuropathy (the most frequent phenotype of X-linked adrenoleukodystrophy) in Europe and the US; results are expected in 2020. Proceeds will also support studies to expand indications for MIN102, including neuroinflammatory and neurodegenerative diseases. (Sep.)

Series B brings In $40m For OncoResponse

OncoResponse Inc. raised $40m through its Series B round, which was led by RiverVest Venture Partners and included investments by first-time buyers Qatar Investment Authority and Redmile Group, along with returning backers Alexandria Venture Investments, ARCH Venture Partners, HT Family Office, Canaan Partners, Helsinn Investment Fund, and William Marsh Rice University. Funds will support ongoing development of the company's five cancer immunotherapy pipeline projects and advance them into preclinical studies and clinical trials. (Sep.)

Series D Brings In $34m For PhaseBio

PhaseBio Pharmaceuticals Inc. closed on a $34m Series D financing to first-time backers Cormorant Asset Management, Rock Springs Capital, and Mountain Group Partners, and returning shareholders New Enterprise Associates, Hatteras Venture Partners, AstraZeneca PLC, Johnson & Johnson Innovation--JJDC, Syno Capital, and Fletcher Spaght Ventures. The financing included the conversion of existing convertible promissory notes. PhaseBio will use the proceeds for ongoing clinical trials of its lead compound PB2452, which is in Phase I for patients on ticagrelor who are experiencing a major bleeding event or who require urgent surgery. The orphan disease firm also plans to commence a Phase II study of PB1046 in Q3 2018 for pulmonary arterial hypertension. Its candidates are based on the elastin-like polypeptide (ELP) half-life extending technology. (Sep.)

Karuna Closes $42m Series A Round

CNS-focused Karuna Pharmaceuticals Inc. raised $42m in a Series A round; $22m of that amount includes the issuance of shares upon conversion of debt into equity. Investors in the financing included Arch Venture Partners, the Wellcome Trust, Steven Paul (a former Eli Lilly & Co. executive and chairman of the Karuna board), parent PureTech Health PLC (which holds a 58.4% ownership), and other undisclosed backers. (Aug.)

The company is hoping to revive xanomeline, a muscarinic acetylcholine receptor agonist that Paul helped to develop while at Lilly. Although demonstrating efficacy in the treatment of psychosis and beneficial effects on cognition, xanomeline was shelved by Lilly due to tolerability issues and negative peripheral cholinergic side effects. Karuna has a worldwide exclusive license for xanomeline, which it is incorporating into lead compound KarXT (xanomeline/trospium chloride). KarXT combines the activator xanomeline with trospium chloride, a well-established muscarinic receptor antagonist (blocker) approved in both the US and Europe for overactive bladder. The co-formulation is designed to selectively target M1/M4 muscarinic cholinergic receptors in the brain while blocking their activation in peripheral tissues. In an initial Phase I proof-of-concept trial completed in late 2016, KarXT demonstrated a significant and clinically meaningful reduction in side effects as well as improved tolerability. The company is currently conducting additional Phase I studies. Karuna will use the proceeds to advance ongoing development of KarXT, including the initiation of a Phase II safety and efficacy trial in schizophrenia patients (anticipated in Q3 2018), and to expand its use into other indications, such as non-opiate pain relief.

Silverback Therapeutics Closes $47.5m Series A Round

Silverback Therapeutics Inc. closed its $47.5m Series A round led by returning shareholder OrbiMed, which was joined by first-time backers Celgene Corp. and Alexandria Venture Investments. (Sep.)

The two-year-old firm is using its ImmunoTAC to develop therapies that are delivered systemically but act locally, thereby sparing healthy tissues from undesired side effects. Silverback’s platform can modulate key pathways in serious conditions in a way that other approaches cannot target due to poor activity or toxicities. Its programs are aimed at cancer and fibrosis.

Scilex Grosses $140m Through Senior Secured Note Financing

Sorrento Therapeutics Inc.'s Scilex Pharmaceuticals Inc., which is working on patch technologies to deliver pain medications, sold institutional investors $224m (aggregate principal amount) in senior secured notes due 2026 for an aggregate purchase price of $140m. (The estimated net proceeds are approximately $89.3m.) The notes are secured by both segregated reserve and collateral accounts as well as all existing and future interests in the company's FDA-cleared non-opioid analgesic ZTlido (lidocaine) topical system. Morgan Stanley was the structuring agent for the transaction. (Sep.)

Scilex, acquired by Sorrento in 2016, will use the proceeds to fund commercialization of ZTlido 1.8%, which received US approval in February 2018 for pain associated with post-herpetic neuralgia (post-shingles pain). The company also filed an MAA in Europe late last year and expects approval in Q4 2018. It is also developing a 5.4% formulation with clinical studies planned for next year. The financing, which Scilex says will provide financial flexibility as it grows both the ZTlido franchise and the company, is structured as follows: Scilex will receive funds in the reserve account upon receipt of FDA marketing approval for ZTlido 5.4% (or a similar product with a concentration of not less than 5%) on or before July 1, 2023. The note holders are entitled to quarterly payments of principal ranging from 10-20% of the net sales of ZTlido 1.8% for the prior fiscal quarter, beginning on Feb. 15, 2019, increased to 15-25% if Scilex has not received the marketing approval by March 31, 2021. If net sales of ZTlido 1.8% are less than 60% of a predetermined target sales threshold for the period from October 1, 2022 through September 30, 2023, then Scilex will be obligated to pay an additional installment of principal each quarter. The aggregate principal amount due under the notes will increase by $28m on Feb. 15, 2022 if ZTlido 1.8% net sales do not equal or exceed 95% of a predetermined sales goal between the issue date and Dec. 31, 2021. If net sales for ZTlido 1.8% do not equal or exceed 80% of a set target sales threshold for the period of Oct. 1, 2022 through Sept. 30, 2023, the aggregate principal will be increased on Nov. 15, 2023 by a sum to be determined according to the amount of deficiency.

Tierra Bio Closes $2.6m Seed Round

Natural products start-up Tierra Biosciences raised $2.6m in an oversubscribed seed financing led by Social Capital, which was joined by Fifty Years and KdT Ventures. (Sep.)

The company concurrently changed its name from Synvitrobio to reflect its focus on creating molecules from nature. In addition, former Novartis AG exec Louis Metzger joined the firm as CSO. Tierra is using capabilities in cell-free synthetic biology, automation, and computation to create new molecules aimed at intracellular targets. Its initial focus is on antibiotics that can combat resistance.

Twentyeight-Seven Therapeutics Raises $65m Via Series A Round

Oncology start-up Twentyeight-Seven Therapeutics Inc. (28-7) raised $65m through its Series A round from investors including MPM Capital and Novartis Venture Fund (co-leads), along with Johnson & Johnson Innovation – JJDC, Inc., Vertex Ventures HC, Longwood Fund, and Astellas Venture Management. (Sep.)

The company was formed in 2016 and is studying the modulation of microRNA (miRNA), short non-coding RNAs, to develop new therapies for cancer and other diseases. Series A proceeds will be used to advance 28-7’s lead project being designed to inhibit Lin28, an RNA modulating protein that reduces levels of Let-7, a tumor suppressor miRNA. (Low levels of Let-7 are correlated with higher cancer aggressiveness.) The company hopes that its candidate will inhibit the binding of Let-7 to Lin28, and increase levels of Let-7 in cancer cells.

ViaCyte Gets $10m Investment From WL Gore

Closely held regenerative medicine firm ViaCyte Inc. received a $10m convertible promissory note investment from partner and returning investor WL Gore & Associates Inc.. Under a March 2017 tie-up, the firms are working together to develop cell encapsulation technologies, initially for ViaCyte’s PEC-Encap for Type I diabetes. Funds from the financing will support clinical development of the candidate. (Sep.)

From the editors of Start-Up