Ronald Crystal's Lexeo Therapeutics pulls in a $100M megaround just nine months after launch
About a month after Lexeo Therapeutics acquired Stelios Therapeutics — bringing its 18-program gene therapy pipeline to 21 — investors are reaching a little deeper into their pockets to ensure the New York City-based biotech is up to the task.
Lexeo unveiled a $100 million Series B round on Thursday morning, led by D1 Capital Partners and Eventide Asset Management. The funds will be used to support the company’s “next phase of growth,” according to CEO Nolan Townsend, with a specific focus on three leading gene therapies — one for CLN2 Batten disease, one for Alzheimer’s, and one for a rare condition called Friedreich’s ataxia.
The company’s roots trace back to gene therapy long hauler Ronald Crystal, who’s been working in the field since the 1980s. He took his ideas to Weill Cornell Medicine in 1993, where he helped build a large gene therapy program and spent more than a decade developing potential candidates.
After deciding to splinter off, Crystal assembled a seasoned brain trust to lead Lexeo, including Townsend, who spent 12 years at Pfizer; chairman Steven Altschuler, who was previously chairman of gene therapy pioneer Spark Therapeutics; and executive VP and CMO Jay Barth, who hails from Amicus Therapeutics and PTC Therapeutics. Crystal has also kept his position at Weill Cornell.
The pipeline currently includes eight candidates for cardiac and CNS disorders, plus another 13 undisclosed programs. However, only two have reached the clinic: LX1004, which recently completed a Phase I/II study and is headed for a pivotal trial in 2022 for CLN2 Batten disease, an autosomal recessive lysosomal storage disease; and LX100, currently in Phase I for APOE4-associated Alzheimer’s disease.
Townsend’s also lining up a third candidate for the clinic, dubbed LX2006, for Friedreich’s ataxia. FA is a rare, degenerative multi-system disorder caused by a gene mutation that disrupts the normal production of the protein frataxin, critical to the function of mitochondria in a cell. Lexeo is planning on submitting an IND for that indication later this year.
Lexeo intends to maintain an ongoing research collaboration with Weill Cornell to bolster their preclinical pipeline — and with the Stelios acquisition back in July, they acquired a new academic partner in UC San Diego’s department of cardiology.
And while Lexeo remains well-funded (the latest round brings the startup’s total raise to $185 million), Townsend says he isn’t ruling out an IPO: “We can create a lot of value and reach clear value creation milestones without an IPO or an additional financing here. So it’s not necessary, but obviously for any company we’re always thinking into the future and that is, you know, one of the considerations that we have.”
In addition to D1 and Eventide, a slate of new and old investors chipped into the round, including CAM Capital, Verition Fund Management, Laurion Capital Management, Gray’s Creek Capital Partners, Longitude Capital, Omega Funds, Lundbeckfonden Ventures, PBM Capital, Janus Henderson Investors, Woodline Partners LP, Invus Capital, and Alexandria Venture Investments.
This story has been updated to clarify that Ronald Crystal still holds his position at Weill Cornell.