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Companies to watch: Biotech startups get trendy
John Carroll ENDPOINTS

John Carroll, Editor and Co-founder of Endpoints

Over the past few years we’ve seen a remarkable swell in the amount of money that’s been coursing through the biotech industry. Last year the US and other hubs racked up record amounts of venture cash being injected into startups as the IPO boom reached a crescendo. And even after the market swooned, we’re still seeing a steady stream of life science companies lining up to go public while venture investing continues at only a slightly slower pace.

 

For biotech’s top hubs—places like Boston/Cambridge, the Bay Area, and the Golden Triangle in the UK—there’s never been a better time to line up funding and tackle a new drug. And some new regions, like New York and Shanghai, are making a serious bid to join the list of emerging hubs. Experienced teams, some led by serial entrepreneurs or the execs leaving big pharma and biotech, can be recruited and fielded in a matter of months.

 

The hotter the field, the more activity seen. Neo-antigens popped up as a target in immuno-oncology, and now there are several companies at work on it. Gene editing based on CRISPR/Cas9 tech was only recently discovered, and now we have two high-profile biotechs that have gone public and a third is lining up their offering. The microbiome went from concept to startup favorite in just a few years.

 

BPA_stat_banners_300x600(Neo-antigens will be a notable topic at BioPharm America™ this September, where Dr. Avery Posey of the University of Pennsylvania (UoP) lab of Carl June, MD will discuss how they’re targeting a new class of carbohydrates of glycoproteins neoantigens by CAR-T cells. Dubbed glycoCARs, they hope this approach will allow targeting of solid tumors with engineered T cells that will not pose any toxicity to normal tissue.)

 

To be sure, the good times can’t erase the extraordinarily high risk associated with drug discovery and development. Not all of these companies will go on to become the next Biogen or Celgene. But a few will do fine, and some will excel.

 

With that in mind, I’ve been hunting up a few examples of biotechs to watch; companies with intriguing, potentially breakthrough science, solid executive teams and enough money to finance a real shot at success. I’m starting off the series of six biotech profiles with a look at Vedanta, a microbiome startup that recently appeared among our top 10 biotechs to raise money in Q2.

 

Vedanta Biosciences: From Bugs to Drug

Fairly recently, fecal transplants became a popular therapeutic. Taking stool teaming with bacteria from a healthy person and transplanting that to a patient with a possibly fatal case of Clostridium difficile have become routine procedures. And there’s new work being done on other gut disorders as well.

 

Bernat-Olle-Vedanta

Bernat Olle, Co-founder, Chief Executive Officer, Member of the BOD, Vedanta Biosciences

Vedanta has a very ambitious goal of going far beyond the rather messy sounding idea of stool transplants by making new drugs out of specific bacterial strains with a proven therapeutic impact. The drugs-from-bugs approach has helped inspire a slate of startups in the arena.

 

Back in 2010, that was just a rough idea in the mind of Bernat Olle, who went on to found Vedanta Biosciences. The company began taking conceptual shape a couple of years after the NIH had launched the Human Microbiome Project, which started funding new research into the role played by trillions of microbes that populate our bodies, developing new tools for investigators.

 

Olle was part of the PureTech team, a startup shop which initiated an outreach effort to start some new conversations with academic researchers in the field at conferences or closer to home around their base in Boston. And from that basic incubation period he tracked new publications and thinking that preceded a surge of attention from pharma companies in 2014 and 2015.

 

One of Vedanta’s scientific co-founders, Kenya Honda, a researcher at the RIKEN Center for Integrative Medical Sciences in Japan, has been a prominent leader in Clostridium research, spotlighting their role in developing regulatory T-cells in the colon that play a role preserving the intestinal barrier.

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J&J’s new Innovations team in Boston stepped in to help fund the company back in the early days of 2013. And in early 2015, the pharma giant provided another big assist when it inked a separate, USD 241 million licensing agreement covering a new IBD project aimed at turning a proprietary blend of Clostridia bacteria into a drug for Crohn’s disease and ulcerative colitis.

 

“This year there has been a wave of interest, more from the investor community,” says Olle, who should know. He just raised USD 50 million to back clinical development work on what could turn out to be a whole new class of drugs.

 

Before the round, Vedanta was 15 people. Now it’s shooting to double its ranks by the end of this year or early next, as it starts to line up clinical programs for 2017. Vedanta has been building up IP around autoimmune and inflammatory diseases. “We’ve also broadened into infectious diseases,” says the CEO.

 

“Some of those species of microbes induce tolerance, calm down the immune system for autoimmune conditions,” he notes. “There are also some microbes that also have opposing properties—like Th17 cells—which are pro-inflammatory, driving a stronger immune response to cancer.”

 

In March, the company deepened the bench considerably when Genzyme vet Bruce Roberts stepped in as chief scientific officer just as the company was expanding into a new HQ facility in Cambridge, MA. Not far from their base you can also find Seres Therapeutics and Synlogic, two other startups operating with their own particular take on the microbiome. While out in San Francisco, Second Genome is promising to make its own microbial waves.

 

The added money at Vedanta is funding a manufacturing effort as the company goes about devising the technology that will be needed to produce a reliable, stable product—much like the original biologics and RNA pioneers had to do.

 

“I want to have the technology in-house,” says Olle, who got both his PhD and MBA at MIT. “Ultimately, and I know this sounds grand, what Genentech was to the biologic field, or Alnylam was to RNA, is what I would really like to do with Vedanta. I want to build a company that’s well financed to drive forward.  No options are off the table. In terms of financing the activities, I do not think right now is a great time for the IPO, but we are looking at the market, potential partners, how to finance the company in multiple different ways.

 

“The moment we or others show that where the immune system is clearly involved, it can also be treated by microbial approaches, then the field could explode,” says Olle. And fecal transplants will give way to more rational, second-generation approaches.

 

Like the ones at Vedanta.

 

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Meet innovative biotech companies like Vendata at Biotech Startup Day, a one-day event during BioPharm America™  in September specifically designed for early stage projects and young companies to get on the radar of the global life science community. Find out more.

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Look for more upcoming posts from John Carroll, Editor and Co-founder of Endpoints in his series “John Carroll’s 6 pre-IPO biotechs to watch,” exclusively on partnering360® Blog.

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