Finance Watch: Multiple VC Mega-Rounds Fund T-Cell, Hearing, IO, Fibrosis Therapies

Private Company Edition: Immunocore’s $130m round kicked off a series of $100m-plus venture capital deals, including financings for Xilio, Akouos and Pliant. Also, VC investment in cell and gene therapies surged in 2019 and MPM launched two funds with $126 for early cancer research.

The month of March began with multiple venture capital mega-rounds of $100m or more, led by Immunocore Ltd.’s $130m series B round at the start of the week, which included large rounds for [Akouos Inc.], Xilio Therapeutics (formerly Akrevia Therapeutics) and Pliant Therapeutics Inc.

The big financings were spread across a variety of disease areas and drug modalities. For instance, Oxford, UK-based Immunocore is developing bispecific biologics that combine a T-cell receptor and an effector function to activate or suppress the immune system in the treatment of cancer, autoimmune and infectious diseases. Meanwhile, Xilio is focused entirely on immuno-oncology, developing therapies that are activated selectively inside tumors.

Both the Immunocore financing (see sidebar) and Xilio’s $100.5m series B round were announced on 2 March. Xilio, operating as Akrevia, previously raised a $30m series A round in October 2018 to fund its development of antibodies, cytokines and chemokines activated within the tumor microenvironment based on intellectual property licensed from City of Hope and Jefferson University; its initial drug candidate was an antibody targeting CTLA-4. (Also see "Finance Watch: Government Grants Galore And Other New Funding Sources" - Scrip, 4 Oct, 2018.)

Waltham, MA-based Xilio will use the series B proceeds to take its tumor-selective anti-CTLA-4 monoclonal antibody known as XTX101 and a second candidate – the tumor-selective interleukin-2 (IL-2) XTX201 – through investigational new drug (IND) application-enabling studies and into Phase I clinical trials while advancing additional cytokine programs.

Takeda Ventures Inc. led Xilio’s series B with participation from new investors SV Health Investors, MRL Ventures Fund, RiverVest Venture Partners, Bay City Capital, Solasta Ventures, M Ventures and Ipsen Ventures and prior funders F-Prime Capital and Atlas Venture.

Akouos announced its $105m series B round on 3 March, which it will use to advance its lead gene therapy program for sensorineural hearing loss through IND filing and acceptance and into Phase I. AK-OTOF will be tested in individuals with hearing loss due to mutations in the otoferlin (OTOF) gene. The Boston-based company also will accelerate the development of additional adeno-associated viral (AAV) vector-based gene therapies for other forms of sensorineural hearing loss.

Pivotal bioVenture Partners led Akouos’ series B with participation from new investors Cormorant Asset Management, Cowen Healthcare Investments, EcoR1 Capital, Fidelity Management and Research Co., Polaris Founders Fund, Pagsgroup, Surveyor Capital (a Citadel company), Wu Capital and other institutional investors. Existing investors also participated: 5AM Ventures, New Enterprise Associates, Novartis Venture Fund, Partners Innovation Fund, RA Capital Management and Sofinnova Investments.

Akouos previously raised a $50m series A round in August 2018. (Also see "Finance Watch: Investments In Regenerative Therapies Surged In The Second Quarter" - Scrip, 10 Aug, 2018.) 

South San Francisco-based Pliant has raised $207m in venture capital to date, including its $100m series C round announced on 3 March. The fibrosis-focused firm also earned $80m up front under its first big pharma partnership – a deal to develop one of its integrin inhibitors with Novartis AG for non-alcoholic steatohepatitis (NASH). (Also see "Novartis Adds To NASH Pipeline By Licensing Pliant’s Integrin Inhibitor" - Scrip, 23 Oct, 2019.)

Pliant launched in 2016 with a $45m series A round to fund its development of tissue-specific inhibitors of integrins to prevent activation of transforming growth factor-beta (TGF-beta). (Also see "Another Early-Stage VC Win: Pliant Raises $45m For Fibrosis Startup" - Scrip, 18 Feb, 2016.) The company garnered $62m from a series B round in July 2018 to pursue clinical proof of concept for its lead candidate to treat idiopathic pulmonary fibrosis (IPF) and primary sclerosing cholangitis (PSC). (Also see "Finance Watch: 2018 Biopharma VC Investment Could Beat 2017 One Quarter Ahead Of Schedule" - Scrip, 16 Jul, 2018.) 

The series C funding also will support the clinical development of PLN-74809, which is being evaluated in a Phase IIa IPF study, and to continue ongoing drug discovery programs in additional fibrotic diseases, including NASH.

Novartis led the series C round with participation from new investors Redmile Group, Farallon Capital Management, Cormorant Asset Management, Surveyor Capital (a Citadel company) and Logos Capital. Existing investors Eventide Asset Management, Cowen Healthcare Investments, Schroder Adveq, Menlo Ventures, SCubed Capital, Agent Capital and undisclosed institutional investors also backed the round.

Venture Investment In Cell And Gene Therapies Surged In 2019

The Alliance for Regenerative Medicine (ARM)’s recently released annual report notes that cell and gene therapy and tissue engineering companies raised $9.8bn in 2019 with venture capital fundraising leading the way. Regenerative medicine companies brought in $4.1bn in venture capital, up from $3.1bn in 2018 and $1.6bn in 2017.

The sector raised $2.4bn from follow-on public offerings in 2019 (versus $4.7bn in 2018), $1.5bn in upfront fees from corporate partnerships ($1.6bn in 2018) and $562m from initial public offerings ($1.9bn in 2018). The $9.8bn total across all categories was the second-highest sum on record for regenerative medicines. [Editor’s note: ARM’s data comes from Informa Pharma Intelligence.]

In other recent private company financings:

• Mountain View, CA-based Amunix Pharmaceuticals Inc. said on 4 March that it closed a $73m series A round to fund its transition from a technology licensing company to a cancer drug developer. Amunix launched in 2006 to develop and out-license its half-life extension technology XTEN and later expanded the platform to include Pro-XTEN, which uses a protease-releasable mask XTEN polypeptide as a mask that enables localized activation of drugs. Now the company will use its series A proceeds plus a $40m upfront fee it received in January from Roche, which will utilize XTEN in new oncology drugs, to develop novel T-cell engagers (XPATs) and cytokines (XPACs) with its Pro-XTEN technology that are selectively activate in the tumor microenvironment. (Also see "Deal Watch: Pfizer, Biogen Partnership One Of Many As JPM Gets Underway" - Scrip, 13 Jan, 2020.) AMX-818, Amunix’s lead XPAT program, is being developed to treat HER2-positive solid tumors; its discovery programs include an IL-12 XPAC. Omega Funds led the series A round with participation from prior investor Frazier Healthcare Partners and new backers Longitude Capital, Redmile Group, Polaris Partners, Casdin Capital, Two River, Venrock and Delian Capital.

• The Swedish company Cinclus Pharma Holding AB said on 4 March that it completed a funding round totaling SEK250m ($26.4m), which will allow the Stockholm-based company to start a Phase II clinical trial in the second half of 2020 for X842, a potassium competitive acid blocker (P-CAB), in the treatment of gastroesophageal reflux disease (GERD). The Fourth Swedish National Pension Fund (AP4) joined as a new major shareholder; current shareholders Bengt Julander, Jonas Sjögren and Recipharm Venture Fund also participated in the financing. Cinclus believes that its drug can provide more satisfactory GERD symptom relief than proton pump inhibitors, such as Nexium (esomeprazole) and Losec (omeprazole), and promote healing of the fretted mucosal lining. X842 is based on a substance previously found to be safe and well tolerated in studies by AstraZeneca PLC that enrolled more than 2,500 patients.

• Jerusalem-based KAHR Medical Ltd. revealed an $18m financing on 25 February, which was led by Flerie Invest AB, Oriella Limited, Hadasit Bio-Holdings (HBL), Pavilion Capital and Mirae Asset Venture Investment. KAHR will use to advance its pipeline of bifunctional immunotherapeutic fusion proteins known as Dual Signaling Proteins, including development through a Phase I/II clinical trial for the anti-CD47 therapy DSP107 in the treatment of solid tumors. The company has narrowed its focus since 2011 when it raised $1m to support programs in cancer and autoimmune diseases. (Also see "Israel's Kahr Medical Attracts Investments From Sanofi, Others" - Scrip, 20 Apr, 2011.)

• Lyon, France-based Advanced BioDesign has more than doubled the amount of private financing it has raised to date, announcing on 25 February that it received €9m ($9.8m) from Xerys Funds. Previously, the company said, it had raised €7.5m ($8.1m) since its founding in 2013. Advanced BioDesign, which is developing therapies for treatment-resistant cancers, plans to take its lead candidate ABD-3001 into a Phase I study in acute myeloid leukemia in early 2021. The drug is designed to trigger an irreversible cascade of reactions that leads to cancer cell death, including cancer stem cells responsible for relapses and metastases.

• Primmune Therapeutics said on 2 March that it closed a $7m seed financing with CAM Capital, Charlie McDermott, BioBrit and BioRock Ventures to fund development of oral small molecule toll-like receptor (TLR7) agonists for long-term systemic activation of innate immunity. Primmune’s TLR7 agonists may help boost response rates and lower relapse rates for patients treated with cancer immunotherapies, because activating systemic innate immunity may boost the efficacy of drugs that engage systemic adaptive immunity, such as checkpoint inhibitors, according to McDermott, the San Diego-based company’s chairman, president and CEO. McDermott previously was president and chief business officer of Impact Biomedicines Inc., which was acquired by Celgene Corp. for $1.1bn up front in 2018 – more than a year before the US Food and Drug Administration approved Impact’s myelofibrosis drug Inrebic (fedratinib). (Also see "Inrebic Approval Is A Boost For Myelofibrosis And Celgene's Buyer Bristol" - Scrip, 16 Aug, 2019.)

Cancer Research Gets A Boost From New MPM Funds

Alongside MPM Capital’s unveiling of its new $100m MPM Oncology Innovations Fund (INV) the investment firm said it also compiled the $26m Dana-Farber Innovations Research Fund (IRF) to support basic cancer research at Dana-Farber Cancer Institute.

INV will be used to create and invest in early-stage biotech companies developing cancer treatments and MPM plans to invest half of the fund in start-ups emerging from Dana-Farber. MPM has a right of first offer to license certain technologies from the cancer treatment and research center that have been identified for commercialization.

Prior collaborations between MPM and Dana-Farber led to the creation of CoStim Pharmaceuticals Inc. and Tizona Therapeutics Inc. Novartis bought CoStim in 2014. (Also see "Novartis buys CoStim as big pharmas boost their cancer immunotherapy arsenals" - Scrip, 17 Feb, 2014.) Tizona launched in 2016 and started 2019 by announcing a collaboration with AbbVie Inc. that gave it $105m in upfront fees. (Also see "Tizona Lands AbbVie Cancer R&D Deal As New CEO Takes Control" - Scrip, 9 Jan, 2019.)