Finance Watch: Nkarta, Passage Bio Raise Venture Capital Mega-Rounds

Private Company Edition: Nkarta, Passage Bio and Achilles kicked off September with VC deals totaling more than $100m each. Also, Repare raised $82.5m and SutroVax won CARB-X cash.

With their summer vacations behind them, three biopharmaceutical companies returned from the long Labor Day weekend in the US with big funding announcements – Achilles Therapeutics Ltd., NKarta Therapeutics Inc. and Passage Bio each raised venture capital rounds exceeding $100m.

Stevenage, UK-based Achilles announced its £100m ($121.8m) series B round on 3 September with plans to use the windfall for the development of its personalized cancer immunotherapies targeting clonal neoantigens. Nkarta and Passage Bio followed with big series B announcements of their own on 4 September, bringing in $114m and $110m, respectively.

Nkarta was launched in 2015 to develop off-the-shelf natural killer (NK) cell therapies based on the research of scientific founder Dario Campana, previously affiliated with St. Jude Children's Research Hospital, but now conducting cell therapy research at the National University of Singapore. The company licensed additional intellectual property from the two research centers last year. (Also see "Tech Transfer Roundup: Amgen Teams With MD Anderson To Accelerate Early-Stage Cancer Candidates" - Scrip, 21 Jun, 2018.)

South San Francisco-based Nkarta has combined its NK cell-expansion technology with proprietary cell-engineering technologies to generate mass quantities of NK cells, enhance NK cell recognition of tumor targets and improve the cells' persistence in the body.

The company recruited Paul Hastings as its CEO in February 2018, not long after the long-time CEO of OncoMed Pharmaceuticals Inc. left the troubled cancer stem cell-focused drug development firm following a months-long medical leave. (Also see "OncoMed Loses Another Asset – Rosmantuzumab – And CEO Paul Hastings" - Scrip, 5 Jan, 2018.) OncoMed's operations have since been folded into Mereo BioPharma Group PLC through a reverse merger. (Also see "Mereo Makes It Stateside With OncoMed Merger " - Scrip, 5 Dec, 2018.)

Nkarta will use its new funding to take lead candidate NKX101 into clinical trials testing the allogeneic NK cell therapy targeting NKG2D in both hematologic malignancies and solid tumors. The series B cash also will support investigational new drug (IND) application-enabling studies for its CAR-NK program targeting CD19 in B-cell malignancies, development of additional NK cell therapies and ongoing construction of a manufacturing facility to support early clinical trials.

"With multiple INDs expected in the next year for an array of hematologic and solid tumors, now is the time to fund the company for its next stage of growth," Hastings said in a statement.

New investor Samsara BioCapital led Nkarta's series B round with participation from other new backers Amgen Ventures, Deerfield Management, Life Science Partners, Logos Capital and RA Capital Management and additional support from prior investors NEA Ventures, Novo Holdings AS and GlaxoSmithKline PLC's corporate VC arm SR One.

Passage Bio Closes Its Second $100m-Plus Round This Year

The $110m series B round for Philadelphia-based Passage Bio, which is developing gene therapies for rare monogenic central nervous system (CNS) diseases, nearly doubled the company's money after it closed a $115.5m series A financing in February. (Also see "Finance Watch: 5AM, Longevity Close Funds, New Incubators Launch To Support Early-Stage Companies" - Scrip, 18 Feb, 2019.)

Access Biotechnology led the series B with participation from existing investors OrbiMed, Frazier Healthcare Partners, Versant Ventures, Lily Asia Ventures, New Leaf Venture Partners and Vivo Capital and new backers Boxer Capital of the Tavistock Group, Highline Capital Management, Logos Capital and Sphera Funds Management.

Passage Bio planned earlier this year to take its two lead programs for GM1 gangliosidosis and frontotemporal dementia (FTD) into the clinic in 2020. Now, the company says it will take three programs into the clinic next year, with trials for the GM1 gangliosidosis and FTD programs expected to begin in the first half of 2019 and a study for Krabbe disease starting in the second half.

The adeno-associated virus (AAV)-delivered gene therapies developed by Passage Bio are based on technology licensed from the University of Pennsylvania's Gene Therapy Program (GTP). Interim CEO Stephen Squinto, a co-founder of rare disease specialist Alexion Pharmaceuticals Inc., co-founded the company with GTP director James Wilson.

Passage Bio has licensed the GTP-developed technology for two additional indications and holds an option to license seven more indications. GTP conducts preclinical investigational new drug (IND)-enabling studies, while Passage Bio is responsible for clinical trials, regulatory and commercial activities. (Also see "Tech Transfer Roundup: Mustang, Nationwide Children’s Hospital Collaborate In Pediatric Glioblastoma" - Scrip, 1 Mar, 2019.)

In another recent and significant series B round, the UK's Gyroscope Therapeutics said on 3 September that it closed a £50.4m ($60.3m) financing. In other recent VC deals:

• Repare Therapeutics Inc. said on 4 September that it closed an $82.5m series B round, which comes barely more than two years after it completed a $68m series A round to fund the development of cancer drugs that target vulnerabilities in tumors within genetically defined patient populations. (Also see "Versant & MPM Back Synthetic Lethality Newco With $68M" - Scrip, 22 Jun, 2017.) Cowen Healthcare Investments led the financing with participation from new investors OrbiMed, Redmile, BVF Partners LP and Logos Capital, with prior backers MPM Capital, Fonds de solidarité FTQ, BDC Capital and founding investor Versant Ventures. From offices in Cambridge, MA, and Montreal, Repare is focused on the fields of synthetic lethality and DNA damage repair for the development of precision oncology drugs. The company plans to take the ATR inhibitor RP-3500 into the clinic in 2020 and advance other candidates, including its Polθ program that is partnered with Ono Pharmaceutical Co. Ltd. in Japan and certain other Asian territories.

• Petach Tikva, Israel-based PolyPid Ltd. revealed on 4 September that it raised $50m in a series E-1 preferred shares financing led by existing institutional shareholders with participation from US-based high net worth investors. The cash will be used to begin two registrational Phase III trials for the company's lead product candidate D-PLEX100, which is designed to provide local and prolonged antibacterial activity for up to four weeks at surgical sites to prevent infections. The US Food and Drug Administration granted D-PLEX100 fast track and qualified infectious disease product (QIDP) designations for the prevention of sternal wound infections following cardiac surgery and for the prevention of infections at abdominal surgery incision sites. (Also see "Keeping Track: Novartis Scores Big Ahead Of US Memorial Day With Approvals For Gene Therapy Zolgensma, Oncologic Piqray" - Pink Sheet, 26 May, 2019.) PolyPid was pursuing an initial public offering in the US, but withdrew its plans for an IPO in March. (Also see "IPO Update: Gottlieb’s Resignation Pulls Down Five Of Eight Newly Public Biopharmas" - Scrip, 7 Mar, 2019.)

• SutroVax Inc. in Foster City, CA, which is developing conjugate vaccines and complex antigen-based vaccines to prevent serious infectious diseases, said on 3 September that it received an award of up to $15m from CARB-X, the nonprofit funder of novel treatments against antibiotic-resistant bacteria. The non-dilutive funding will support development of a universal vaccine to prevent infections caused by Group A Strep bacteria, including pharyngitis, impetigo and necrotizing fasciitis. SutroVax will receive $1.6m up front and may collect additional installments based on the achievement of various milestones for its conjugate vaccine, which is based on science discovered at the University of California, San Diego. The company previously raised $85m in a series C round in June 2018. (Also see "Finance Watch: Pfizer Ventures' Dalton Makes Sense Of Neuroscience Focus Within New $600m VC Fund Commitment" - Scrip, 12 Jun, 2018.)

• Basel, Switzerland-based Strekin AG announced on 3 September that it closed a CHF2.82m ($2.88m) series A round that will help the company complete the ongoing Phase III RESTORE trial for STR001 in sudden sensorineural hearing loss, from which top-line results are expected in early 2020. The fund will also help it begin preparations for a regulatory filing in the EU and seek a corporate exit, either through an IPO or sale of the company. In preclinical studies, Strekin said its lead drug candidate protected hearing in animal models by blocking oxidative stress and reducing activation of inflammatory signaling in the cochlea. (Also see "Pharma Wakes Up To Transformative Progress In Hearing Loss Research" - Scrip, 12 Dec, 2018.)