Launching with hearty Series A rounds, these new companies are ready to run.
While many businesses have faced falling revenues and closed doors in 2020, biotech is one arena where business is still booming. Here are some startups launching and raking in cash today.
Neuron23
Having worked undercover for two years, Neuron23 finally uncloaked today with $113.5 million in financing for its launch. $30 million of the funds came from Westlake Village BioPartners, who just announced two funds totaling $500 million with the intent to invest in Series A startups in the most promising companies.
Neuron23 has hit the ground running, aiming to take on Parkinson’s disease against giant Biogen, who recently orchestrated in a $1 billion deal with Denali with the same target in mind. With Denali already ahead on the trial timeline, Neuron23 had been waiting in the wings for the right time to enter the race. CEO Nancy Stagliano felt the time was now given the recent surge in focus on CNS disease.
Founded through a partnership with German biotech Origenis, Neuro23’s lead program is targeting LRRK2, a gene mutation strongly associated with 3% of patients with Parkinson’s and systemic inflammatory diseases. Exciting evidence is also emerging that this mutation may also play a role in the larger population of Parkinson’s patients, extending opportunities for the patients it can help. The plan is to start trials with healthy volunteers next year.
In addition to Parkinson’s disease, inhibiting the LRRK2 mutation may have potential for inflammatory disorders, such as Crohn’s disease.
Without disclosing a specific target, Neuron23 is also working with TYK2, an immune signaling protein with a known role in inflammatory disorders. Preclinical studies show that certain mutations may protect against autoimmune disease without causing immunodeficiency. Giving Neuron23’s TYK2 inhibitors a leg up on the competition, its candidate can cross the brain-blood barrier for CNS disorder potential.
With plans to announce more targets and diseases in the future, Stagliano has big plans for Neuron 23’s future. She’s even looking out over the stern of her company reminiscent of Captain Ahab with an eye on the white whale – Alzheimer’s.
Exo Therapeutics
Based on research from the lab of David Liu, Exo Therapeutics announced their launch today to drug the undruggable. While Liu is now best known for his work in CRISPR technologies, he also ran a Harvard lab that developed a small molecule inhibitor of insulin-degrading enzymes.
While traditional methods couldn’t block the enzyme that was degrading insulin for diabetics without also losing glucagon, a hormone essential for converting stored glycogen back into glucose. The solution found by Liu’s team is in leaving the active site of the enzyme alone and targeting the exosite instead to achieve selective inhibition.
Exo CEO Michael Bruce came on in February to take this idea of discovering and targeting the exosite on an enzyme. Currently less than 700 enzymes make up the entire drug industry, which leaves well over 9,000 untouched, playing a role in human disease. Bruce believes Exo can create drugs to target those that can’t be drugged traditionally, even those playing a role in cancer and inflammation.
Another attractive quality in Exo’s targets for Bruce was the fact that they dealt in small molecule drugs. Currently, 60-75% of all drugs approved by the FDA are still small molecule drugs. The pathway to approval is much clearer than that of newer, experimental therapies.
With $25 million from a Series A, Exo was ready to come out of stealth mode and run with the discoveries made by Liu’s team. The company will take the funds to find more exosites to target for new drug development while advancing the current set of programs toward identifitying candidates for clinical trials within the next few years.
“It’s a year of building and it’s a year about chance for us,” Bruce said.
Atsena Therapeutics
Another 2020 startup is celebrating an oversubscribed Series A today. Durham-based Atsena Therapeutics took in $55 million from investors to advance its gene therapy for one of the most common cause of blindness in children through clinical trials.
Leber congenital amaurosis (LCA) causes blindness in 2 to 3 out of 100,000 newborns. Roche-aquired Spark Therapeutics had the first directly administered gene therapy approved by the FDA in 2017 for LCA.
The company’s pipeline is powered by adeno-associated virus technology, tailored to overcome the hurdles of inherited retinal disease and guided by specific needs of each condition. Some DNA payloads are too large to fit into a single vector. Atsena uses a dual AAV approach to split the code in half and deliver via separate vectors in tandem. Once cells are infected, the code recombines to deliver the full payload.
“We needed to raise additional capital to accelerate the growth of the company,” said CEO Patrick Ritschel, who previously led another Durham gene therapy company called StrideBio.
Atsena’s GUCY2D therapy is administered via subretinal injection. The ongoing Phase I/II trial treats just one eye to leave the other eye as a control, with follow up appointments for a year. Funds will be used to complete this trial and prep for Phase III testing.
The company is looking to move into a larger space next year to scale up gene therapy manufacturing. Ramping up across the board, there’s a goal to hire 20 more positions with the move.
According to CEO Pat Ritschel, Atsena’s platform promises to “overcome the unique hurdles of inherited retinal diseases to prevent or reverse blindness.”
