Venture Funding Deals: Spin-Outs From Axovant, Inovio & Sosei

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 January and February 2019.

Series E Brings $18m To 3-V Biosciences

3-V Biosciences Inc., which is developing drugs for cancer and nonalcoholic steatohepatitis (NASH), raised $18m through its Series E round. New investor and partner Ascletis Pharma Inc. led and was joined by Qianhai Ark (Cayman) Investment, New Enterprise Associates, and Kleiner Perkins. Purchasers committed to fund an additional $7m through a later round. The funding was announced concurrent with 3-V granting Ascletis exclusive rights to develop, manufacture, and sell its fatty acid synthase inhibitor TVB2640 (ASC40) in Greater China for NASH. Series E proceeds will support upcoming Phase II trials in the US and China of TVB2640. 

Apic Bio Closes $40m Series A Round

Apic Bio Inc. closed a $40m Series A round led by Morningside Venture Investments (adds a board member), which was joined by other new investor ALS Investment Fund, along with returning backers the Alpha-1 Project (TAP) and A1ATD Investors. The 2017 University of Massachusetts spin-off will use the proceeds to finance preclinical compounds APB101 (a one-time gene insertion of AAT) for Alpha-1 antitrypsin deficiency and APB102 (targeting the mutation of the C9orf72 gene) for amyotrophic lateral sclerosis as well as other pipeline programs in those disease areas. The funds will also support ongoing discovery activities involving the company’s THRIVE gene silencing and replacing platform. 

Arvelle Spins Off From Axovant

Axovant Sciences Ltd. spun off its small molecule platform assets into a new company, Arvelle Therapeutics GmbH, which received commitments for an initial capital raise of over $100m (assumed to be its Series A round) from a syndicate of investors, including NovaQuest Capital Management, Life Science Partners, BRV Capital Management, Andera Partners, and HIG BioHealth Partners. 

Last year Axovant discontinued development of all its small molecule candidates, following failures of intepirdine in Phase II trials in Lewy body dementia (LBD) and gait impairment and a Phase III study in Alzheimer's disease, and a Phase II trial of nelotanserin for REM behavior disorder (RBD) in LBD patients not meeting its primary endpoint. In the current deal, Axovant receives a 5% preferred equity stake in CNS-focused Arvelle, which will be led by Axovant’s current Chief Commercial Officer Mark Altmeyer as president and CEO. The transaction enables Axovant to focus solely on its neurological and neuromuscular disease gene therapy pipeline, while reducing R&D costs and realizing the legacy small molecule platform's long-term value. In a concurrent license agreement worth up to $530m, Arvelle gained European rights to SK Biopharmaceuticals Co. Ltd.' NDA-filed anticonvulsant cenobamate for focal (partial-onset) seizures. Although Axovant was involved in structuring the alliance, it is not contributing any capital to Arvelle's initial financing, which will be non-dilutive to Axovant’s shareholders.

BiomX Brings In $32m In Series B Financing

Microbiome firm BiomX Ltd. raised $32m in its Series B financing led by returning shareholders OrbiMed, Johnson & Johnson Innovation – JJDC, Takeda Ventures, 8VC, MiraeAsset, Seventure Partners, SBI Japan-Israel Innovation Fund, and additional European investors, as well as first-time backers RM Global Partners, Chong Kun Dang Pharmaceutical Corp., Handok, KB Investment, and Consensus Business Group. Representatives from RM Global Partners and Seventure will join the board.

The company will use the proceeds to move its acne and inflammatory bowel disease programs into the clinic. The acne candidate should commence Phase I this year, followed by the IBD compound in 2020. Founded in 2015, BiomX is developing customized phage therapies that seek and destroy harmful bacteria in chronic diseases. Its platforms use computational and synthetic biology in their R&D activities.

Series B Brings $54m To Bolt Biotherapeutics

Oncology drug developer Bolt Biotherapeutics Inc. raised $54m through its Series B round from new investors Pivotal bioVenture Partners (lead) and Nan Fung Life Sciences, which were joined by Series A investors Novo Holdings and Vivo Capital. The company's Boltbody platform systematically delivers immune-stimulating antibody conjugates designed to convert cold tumors (tumors that the immune system doesn't respond to) into immunologically hot tumors. Initial cancer targets haven't been revealed, but the company says it plans to develop treatments for patients who don't respond to checkpoint inhibitors. 

Calypso Biotech Raises €20m In Series A Round

Calypso Biotech BV, spun off of Merck Serono SA to work on therapeutic antibodies for autoimmune diseases, raised €20m ($22.8m) through its Series A round. Gilde Healthcare and Inkef Capital co-led and were joined by Johnson & Johnson Innovation - JJDC, Inc. (JJDC), and founding investor M Ventures. Funds will support development of CALY002, a preclinical interleukin-15 antibody that has orphan drug designation in the US and Europe for eosinophilic esophagitis. The candidate is also being considered for other undisclosed immune conditions. 

Seed Financing Brings In $3.7m For Cell Mogrify

UK-based cell therapies developer Cell Mogrify Ltd. raised $3.7m in its seed financing led by returning investor Ahren Innovation Capital, which was joined by 24Haymarket and Darrin M. Disley who was concurrently appointed as the firm’s CEO. 

Cell Mogrify’s approach involves the use of next-generation sequencing and gene-regulatory data to identify the optimal combination of transcription factors or small molecules needed to convert any mature cell type into any other mature cell type without going through a pluripotent stem cell- or even a progenitor cell-state. The platform addresses efficacy, safety, and scalability issues facing current methods for the development and manufacturing of cell therapies. Cell Mogrify seeks to create cell therapeutics across all therapy areas.

Geneos Spins Out Of Inovio

Geneos Therapeutics spun out of Inovio Pharmaceuticals Inc. and raised $10.5m in its Series A round from Inovio and Sante Ventures. Geneos concurrently licensed Inovio's DNA-based immunotherapy platform, which it will use to develop personalized neoantigen-targeting cancer treatments. Series A proceeds will help Geneos establish its operations and complete IND-enabling studies leading to first-in-human trials of an initial tumor specific neoantigen-targeted (TSNA-targeted) personalized immunotherapy. Following the spin-out, Inovio's COO Niranjan Sardesai, who also co-founded Geneos and is the firm's CEO, will leave his post at Inovio to focus all of his efforts on leading Geneos.

Series D Brings In $37.4m For Hookipa

Hookipa Pharma Inc., focused on therapies for infectious diseases and cancers, raised $37.4m (€33.2m) in its Series D financing led by Redmile Group, which was joined by other new backers Invus and Samsara BioCapital, and several returning shareholders. The company will use the funds for ongoing clinical development of its Phase II HB101 prophylactic cytomegalovirus vaccine candidate, and preclinical HB202 for human papillomavirus-positive cancers. Additional money will help Hookipa use its arenavirus platform in the development of its immuno-oncology pipeline. 

ImmuneOncia Gets $40m In First Round

ImmuneOncia Therapeutics LLC, a joint venture created in 2016 by Yuhan Corp. and Sorrento Therapeutics Inc., raised $40m in its first funding round led by Paratus SP (Private Equity Fund). As a result of the financing, Yuhan's ownership stake in ImmuneOncia has dropped from 51% to 36.1%. (Sorrento now holds 34.6% and Paratus' stake is 29.3%.) ImmuneOncia will use the proceeds to advance Phase I and Phase II trials of PD-L1 monoclonal antibody candidate IMC001 for solid tumors, and also to fund earlier stage projects. The company claims that it is now funded sufficiently to carry it through to a planned 2021 initial public offering. 

Neurogene Launches With $68.5m Series A Round

Rare neurological disease-focused gene therapy start-up Neurogene Inc. launched with a $68.5m Series A round from investors including Samsara BioCapital, EcorR1 Capital, Cormorant Asset Management, Redmile Group, and an undisclosed health care investment fund. 

Neurogene is using an engineered adeno-associated virus (AAV) approach – which delivers an operational copy of a gene to replace the dysfunctional one to treat rare, genetic CNS disorders – incorporating the science and expertise (in development, neuroimmunology, AAV vector design, and CNS delivery) contributed by the University of Texas Southwestern Medical Center, one of the company's academic collaborators. Neurogene's pipeline includes a candidate for aspartyglucosaminuria (AGU, an inherited enzyme deficiency that leads to progressive cognitive decline), a potential therapy for Charcot-Marie-Tooth disease (CMT4J), as well as two undisclosed lysosomal storage disorder candidates. Just prior to this financing, Neurogene presented positive preclinical data evaluating the safety and efficacy of the AAV therapy in the AGU and CMT4J programs. With the proceeds, the company aims to advance its gene therapy pipeline into IND-enabling studies and clinical trials and build a viral vector manufacturing facility.

Oyster Point Pharma Raises $93m In Series B Round

Four-year-old Oyster Point Pharma Inc. raised $93m its Series B financing led by Invus Opportunities, Flying L Partners, and KKR’s newly created Falcon Vision, which were joined by returning shareholders New Enterprise Associates and Versant Ventures, and first-time backer Vida Ventures. 

Oyster Point is initially focused on the development of therapies for dry eye disease (DED) through stimulation of the trigeminal parasympathetic pathway to activate the glands responsible for tear film production. Its lead dry eye programs OC01 and OC02 are ocular surface-sparing nasal sprays designed to promote natural tear film production through stimulation of the trigeminal parasympathetic pathway. In Phase IIb studies they demonstrated improvement in the signs and symptoms of DED and were well-tolerated with no significant adverse effects. Series B funds will help move the candidates into Phase III trials.

Passage Bio Launches With $115.5m Series A Round

Neuro-focused Passage Bio, working on AAV-delivered gene therapies, launched with a $115.5 million Series A round led by OrbiMed, Frazier Healthcare Partners, Versant Ventures, New Leaf Venture Partners, Vivo Capital, and Lilly Asia Ventures. 

The company will use the proceeds to fund a pipeline of five candidates focused on rare monogenic CNS diseases, including GM1 gangliosidosis (GM1) and frontotemporal dementia (FTD). The programs were concurrently in-licensed from the University of Pennsylvania, where they were discovered by company co-founder and chief scientific advisor James M. Wilson. Passage also has the option to license up to seven more rare monogenic CNS indication programs from Penn. In early 2020, the company expects to advance into the clinic programs in GM1 and FTD.

Peloton Therapeutics Gets $150m In Series E Round

Peloton Therapeutics Inc., which is developing cancer compounds targeting unexploited molecular vulnerabilities, raised $150m through its Series E round from RA Capital Management (lead), new investors Eventide Asset Management, Biotechnology Value Fund, OrbiMed, EcoR1 Capital, Vida Ventures, Curative Ventures and Driehaus Capital Management LLC, and existing investors The Column Group, Nextech Invest Ltd, Topspin Fund LP, Tichenor Ventures LLC and Foresite Capital Management. Funds will help the company advance its lead selective oral HIF-2a inhibitor PT2977 into Phase III studies for advanced clear cell renal cell carcinoma. 

Sojournix Closes $44m Series C Round

Women's health and neuroendocrine disorder therapeutics play Sojournix Inc. closed a $44m Series C financing round from investors including RA Capital Management, Boxer Capital (of the Tavistock Group), Frazier Healthcare Partners, Venrock Healthcare Capital Partners, and Janus Henderson. The company will use the proceeds to advance development of lead compound SJX653, a non-hormonal, once-daily, small-molecule selective neurokinin-3 (NK3) receptor antagonist. In-licensed from H. Lundbeck AS in 2017, SJX653 is in Phase I for moderate to severe menopausal vasomotor symptoms. Founded in 2016, Sojournix has raised $70m to date. 

Inexia/Orexia Spun Off By Sosei Heptares

Sosei Heptares (formerly Sosei Group Corp.) spun off two independent companies, Inexia Ltd. and Orexia Ltd., which will focus on developing neurological disease therapies based on Sosei subsidiary Heptares Therapeutics Ltd.'s orexin-positive G protein-coupled receptor (GPCR) modulators OX1 and OX2. Medicxi is investing in both companies with an aggregate amount of up to €40m ($45.8m). 

In exchange for OX1 and OX2 and a portfolio of related patents, Heptares Therapeutics – which retains an equity stake in both companies – will receive R&D and milestone payments. With a primary indication of narcolepsy, Inexia will focus on intranasally administered orexin positive modulators (using exhalation delivery systems concurrently in-licensed from OptiNose Inc.), while Orexia plans to develop oral orexin- positive modulator therapies. Mario Alberto Accardi – board member of several therapeutic, medical device, and digital health start-ups, most recently, co-founder of [Orthonika Ltd.] in 2015 – will serve as CEO to both companies.

Vor Biopharma Raises $42m In Series A Round

Vor Biopharma Inc. raised $42m through its Series A round. RA Capital Management and 5AM Ventures co-led and were joined by Johnson & Johnson Innovation – JJDC, Inc. (JJDC), Novartis Institutes for BioMedical Research, and Osage University Partners, and founding investor PureTech Health PLC. Vor is developing oncology immunotherapies based on its engineered hematopoietic stem cell technology, and will use the Series A proceeds to advance its lead acute myeloid leukemia candidate closer to clinical trials. 

 From the editors of Start-Up