VC Roundup: Cleave Raises $37m To Maintain Phase I Momentum, Plus $233.5m In Recent Financings

Cleave Biosciences leads off a recent slate of venture capital financings with $37m to fund ongoing Phase I programs for the lead drug from its protein homeostasis-focused platform.

Cleave Biosciences Inc. has raised a $37m Series B round to fund two ongoing Phase I clinical trials for its lead drug candidate CB-5083, initiate a third trial, and to continue its hunt for therapeutic candidates that target proteins responsible for the survival of cancer cells.

Burlingame, California-based Cleave has raised $91m in venture capital during the past five years to discover and develop drugs that target enzymes involved in protein homeostasis. The money raised under the umbrella of its 2011 Series A round, which was expanded to $54m in 2013, helped the company take its lead drug candidate CB-5083 targeting p97 into two Phase I clinical trials in the treatment of cancer patients with solid tumors and hematologic malignancies. (Also see "Cleave adds $10m to Series A for cancer drugs " - Scrip, 9 Apr, 2013.)

CEO Laura Shawver told Scrip that the Series B financing will allow Cleave to finish its two ongoing trials, including expansion of those studies into specific cancer types, and to start a new study in acute myeloid leukemia (AML) in 2017.

Shawver said the company still is determining the indications in which CB-5083 will be tested in the Phase I expansion cohorts, but multiple myeloma patients will be enrolled in one of the hematologic malignancy study's cohorts and one solid tumor cohort may enroll patients with KRAS-mutated colorectal cancer. She noted that dose escalation has been going on for 18 months in the Phase I studies and CB-5083 has been well-tolerated to date.

A Focused Approach To Protein Homeostasis

Cleave has narrowed its focus to two enzyme classes involved in protein homeostasis – AAA ATPases and novel zinc-dependent JAMM metalloproteases. The CB-5083 target p97 is a member of the AAA ATPase family. The enzyme is one of many that controls the number of proteins associated with cancer cell survival.

The mechanism of action already has been validated by proteasome inhibitors approved to treat multiple myeloma – Takeda Pharmaceutical Co. Ltd.'s Velcade (bortezomib) and Amgen Inc.'s Kyprolis (carfilzomib). CB-5083's target lies upstream of where those drugs work within the process of protein homeostasis, so Cleave's drug should have a more potent effect.

The company's next step is to determine which other cancers driven by the activity of p97 could be effectively treated by inhibiting the enzyme. To that end, Cleave's new investors include a big biopharma investor with a general interest in novel cancer therapeutics and particular interests in multiple myeloma and protein homeostasis.

Celgene Corp. joined Nextech Invest Ltd. and Arcus Ventures as new Cleave investors as of the Series B round, which also was supported by the firm's Series A investors: 5AM Ventures, Clarus Ventures, New Enterprise Associates, OrbiMed Advisors, US Venture Partners, Astellas Venture Management and Osage University Partners.

Celgene sells the multiple myeloma backbone therapy Revlimid (lenalidomide), which is the biggest contributor to the company's revenue – $1.7bn out of its $2.75bn in second quarter 2016 sales. (Also see "Celgene’s Otezla Shines, On Track To Be A Fourth Blockbuster Pillar" - Scrip, 28 Jul, 2016.)

Celgene also has invested in protein homeostasis via two collaborations. One with Nurix Inc. worth $150m up front was announced in September. (Also see "Celgene, Nurix Collaborate For $150m Up Front" - Scrip, 17 Sep, 2015.) In the other transaction, Celgene gave Forma Therapeutics Holdings LLC an undisclosed upfront fee plus $200m in initial research funding under the first of two major deals between the companies. (Also see "Forma and Celgene form a protein homeostasis deal" - Scrip, 30 Apr, 2013.)

"Protein homeostasis is of strategic interest to Celgene and p97 fits in that, but they are purely an investor in our Series B," Shawver said.

She also noted that Cleave has always intended to demonstrate clinical proof of concept for CB-5083 before the company seeks a partner for later-stage development and commercialization.

"We have the funding we need to get to the next value inflection point," Shawver said.

Cleave's Series A investor Astellas Venture Management also has an interest in multiple myeloma, since its parent company Astellas Pharma Inc. has a 5% stake in Takeda's Treanda (bendamustine), which is approved to treat multiple myeloma in Europe. Astellas also is testing the insulin-like growth factor-1 receptor (IGF-1R) inhibitor linsitinib in Phase I/II multiple myeloma and solid tumor studies.

The Japanese company also has a protein homeostasis-focused drug development pact with Proteostasis Therapeutics Inc. that's worth up to $1.2bn plus royalties. (Also see "Astellas Taps Proteostasis In Potential $1.2bn Alliance" - Scrip, 4 Nov, 2014.)

"Protein homeostasis itself is a validated pathway. I think that's what gives people confidence that CB-5083 will become a multiple myeloma treatment," Shawver said.

She noted that the drug also combines well with therapies that have become part of the multiple myeloma standard of care, including Revlimid, Velcade, Kyprolis and Johnson & Johnson's CD38-targeting monoclonal antibody Darzalex (daratumumab), which won FDA approval for its first multiple myeloma indication in November. (Also see "Janssen/Genmab Win 1st Anti-CD38 In Multiple Myeloma" - Scrip, 17 Nov, 2015.)

But while Cleave's clinical programs for CB-5083 are expanding and the company hopes to identify additional drug candidates with its Series B cash, Shawver said there won't be an immediate hiring of new employees beyond the current staff of 28 people.

"We don't expect to really be adding any personnel for the next six months. After that, it will be dependent on how broad the further development of CB-5083 will be," she said.

Another $233.5m In VC Rounds, Including Three Non-Cancer Companies

Cancer and immuno-oncology continue to be the darlings of biotech venture capital investment, but the table below lists eight companies that raised a total of $233.5m since Scrip's last VC Roundup, including companies investing in chronic kidney disease, female contraceptive products, pain, metabolic disorders and infectious diseases. (Also see "VC Roundup: 2Q Financings Fall As Per-Company Averages Rise" - Scrip, 20 Jul, 2016.)

Details for some of the financings in the table below were provided by Strategic Transactions, a biopharma and medtech deal information service provider that's affiliated with Scrip [see the companies in the table below marked (ST)].

Scrip also recently published ST's August listing of biopharma venture capital deals, which details VC financings announced in June and July. (Also see "Venture Funding Deals, August 2016" - Scrip, 10 Aug, 2016.) This comprehensive monthly listing previously was published by Start-Up – an Informa Pharma Insights product that recently was folded into Scrip.

Company	Investors	Use Of Proceeds
Tricida Inc.; South San Francisco (ST)	Tricida raised $55m through its Series C round from new investors Longitude Capital (lead) and Vivo Capital, and returning backers OrbiMed, Sibling Capital Ventures and Limulus Venture Partners.	Proceeds will help fund development of lead candidate TRC101, which is in Phase I/II trials for chronic kidney disease. Including the current round, Tricida has raised $95m since its 2013 inception, including a $30m Series B round in March 2015. (Also see "BioNotebook: PhaseBio closes $40m Series C round led by AstraZeneca, plus five other VC financings" - Scrip, 12 Mar, 2015.)
Iconic Therapeutics; South San Francisco	Iconic said on Aug. 9 that it completed the final closing for its Series C round, which was first announced in January, bringing the total to $48.5m. Xeraya Capital joined existing investors MPM Capital, HBM Healthcare Investments, H.I.G. BioHealth Partners, Lundbeckfonden Ventures, Cormorant Asset Management and Osage University Partners. (Also see "VC Round-Up: Microbiome Focused Lodo, T-Cell Firm Tmunity, And More" - Scrip, 15 Jan, 2016.)	The company is developing treatments for retinal diseases and cancer based on Tissue Factor biology. Iconic's new venture capital will be used to fund ongoing clinical trials and begin additional studies for lead molecule ICON-1 in the treatment of retinal diseases and ocular melanoma. The drug is a novel fusion protein that targets inflammation and angiogenesis, which leads to vision loss in age-related macular edema (AMD). A Phase I study in wet AMD has been completed and enrollment is complete for a Phase IIa trial in newly diagnosed AMD.
Ambrx Inc.; San Diego (ST)	Ambrx Inc., which is developing protein therapeutics known as bio-conjugates, raised $45mm in a late-stage financing round led by Apricot Capital and Northeast Securities Prosperity Healthcare Fund. Sinopharm Capital, Humanwell Healthcare Fund, and existing investors Fosun Pharma, HOPU Investments and Everbright Limited Healthcare Fund also participated.	The company will use the funds to further develop its Phase I asset ARX788 along with its pipeline of antibody-drug conjugates (ADCs) and lead immuno-oncology program CD3-folate. After withdrawing its planned IPO in June 2014, the company was acquired by a consortium consisting of entities affiliated with Shanghai Fosun Pharmaceutical Group Co. Ltd., HOPU Investments, China Everbright Ltd.'s CEL Healthcare Fund, and WuXi PharmaTech Inc. (Also see "Ambrx Looks Across Pacific For A Secure Future" - Scrip, 26 May, 2015.)
Evofem Inc.; San Diego	UK-based Woodford Investment Management committed up to $25m to Evofem via a Series D preferred stock financing.	Evofem will use the money to enhance its clinical and commercial infrastructure and to add product candidates to its pipeline of non-hormonal, woman-controlled, on-demand and rapidly-reversible contraceptives. The company said in July that it filed a new drug application (NDA) with the US FDA for the non-hormonal vaginal contraceptive gel Amphora. (Also see "Keeping Track: FDA Nixes Medicure’s Aggrastat For STEMI, Approves Insys’ Syndros" - Pink Sheet, 10 Jul, 2016.) Evofem also has completed Phase III trials for the Nesterone Ring, a once-yearly contraceptive vaginal ring.
AvroBio Inc.; Cambridge, Massachusetts	Atlas Venture, Clarus Ventures LLC and SV Life Sciences co-led a $25m Series A round for the gene therapy company.	AvroBio will use the VC cash to accelerate clinical development of its two ex vivo gene therapy programs for Fabry disease and acute myeloid leukemia (AML), which both are being evaluated in Phase I studies, and to expand its pipeline of rare disease and cancer treatments. Both therapies are one-time treatments.
Bioniz Therapeutics, Inc.; Irvine, California	Takeda Ventures Inc. and former Allergan Inc. Chairman and CEO David Pyott co-led a $13m Series A round for the startup with participation from Cota Capital and Joe Kani, Chairman and CEO of the medical device company Masimo Corp. Pyott has been named chairman of the Bioniz board of directors and Kani also is a board member.	Bioniz is developing first-in-class peptide therapeutics that selectively and simultaneously inhibit multiple cytokines to treat immuno-inflammatory diseases and cancer. The Series A capital will allow the company to advance its two lead drug candidates: BNZ-1, which selectively inhibits Interleukin 2 (IL-2), IL-9 and IL-15 for the treatment of HTLV-1 associated myelopathy (HAM) and certain T cell leukemias, and the preclinical asset BNZ-2, which is a selective inhibitor of IL-15 and IL-21 for the treatment of celiac disease and other immuno-inflammatory disorders of the gastrointestinal tract. Bioniz's expertise in cytokine biology originates from work conducted by the National Institutes of Health (NIH) and the company plans to begin a Phase I trial soon for BNZ-1 in conjunction with the NIH.
Dauntless Pharmaceuticals Inc.; San Diego (ST)	Sofinnova Ventures invested $12m in the startup's Series A round. Dauntless is headed by President and CEO Joel Martin, who previously served in the same position at Cebix Inc., another biopharma that was backed by Sofinnova. (Also see "$31m in new funds to help Cebix progress novel peripheral neuropathy candidate " - Scrip, 19 Oct, 2012.)	Series A funds will support work on Dauntless's first compound DP1038, which is in preclinical studies for endocrine cancers. The project will be formulated with Aegis Therapeutics LLC's Intravail intranasal drug delivery technology, to which Dauntless licensed rights in a concurrently announced alliance, which includes an option to license the technology for three additional candidates. Dauntless will develop each of its drug candidates in separate corporations. DP1038 will live under the first such unit, Dauntless 1.
Synthorx Inc.; San Diego (ST)	Synthorx raised $10m in a Series B round led by RA Capital Management and joined by Series A investors Avalon Ventures and Correlation Ventures.	The company specializes in synthetic biology for novel protein therapeutics. It will use the proceeds of its Series A financing for the development and scale-up of protein therapeutics that incorporate one or more synthetic amino acids and to nearly double its head count. The technology is based on discoveries that began in Floyd Romesberg's lab at the Scripps Research Institute in San Diego. Potential therapy areas that Synthorx may focus on include pain, metabolic conditions and infectious diseases.