Venture

Another mega-startup: China investors back TCR2’s $125M cash round to fuel a preclinical assault on solid tumors

Garry Menzel

In yet another display of biotech’s bold fundraising environment right now, a Cambridge, MA-based startup with a handful of preclinical cancer drugs in its pipeline has scored a $125 million mega-round — with all of the cash in the bank.

TCR2 Therapeutics tells me they wanted flexibility to pursue “multiple programs in multiple formats,” which requires a significant amount of cash on hand. When people get hyped about mega-rounds, sobering realists will always point out how mega-rounds are usually tranched. That means the cash is gated, and access to that cash is dependent on the startup meeting certain milestones.

This arrangement provides some protection for cautious investors, and is commonplace considering this industry’s failure rate. Investors in this case, however, appear to have thrown that caution to the wind, banking on TCR2’s ability to provide a return one way or another.

“All the money arrives in the bank on day one,” said Garry Menzel, CEO at TCR2.

How did the company get so much cash to play with? In part, they tapped flush investor groups in China, one component of a an increasingly popular strategic move to focus heavily in that market.

“There’s so much activity in China right now,” Menzel said. “There’s a tremendous amount of clinical experience, good manufacturing capabilities, and it’s a big market.”

The mega-round was co-led by Shanghai-based 6 Dimensions Capital and Dallas-based Curative Ventures. A long (long) list of new investors and existing investors joined in, including MPM Capital (a major investor in the oncology space). Check out the company’s press release for the full rundown.

Patrick Baeuerle

What has these investors so jazzed? TCR2 thinks it can leverage the company’s understanding of the T cell receptor structure to improve on how the body’s cancer-fighting cells respond to disease. The hope is to break down barriers that have limited efficacy, extending immuno-oncology’s range into solid tumors.

The company was founded in 2015 by cancer immunologist Patrick Baeuerle, managing director of MPM Capital. You might recognize Baeuerle as the former CSO of Micromet, which used an antibody to redirect killer T cells to destroy tumor cells. Amgen went on to acquire Micromet in 2012 in a deal valued at $1 billion-plus, bringing Baeuerle on board to Amgen to continue working on Blincyto, an antibody-based leukemia drug.

Now Baeuerle sits on the board of TCR2, a company that wants to take immuno-oncology far past where CAR-Ts can go.

“There’s a lot of excitement around CAR-T, and a lot of companies in that space,” Menzel said. “But CAR-T ran into a brick wall with solid tumors. There’s just been no activity there.”

TCR² takes its name from T cell receptors (TCR), molecules on the surfaces of immune cells that recognize a specific molecular target, or antigen, and focus an immune attack on cells with that target. But CAR-T only taps a part of a TCR’s full structure.

“You can think of CAR-T as a piece of the TCR,” Menzel said. “TCR has six subunits, and CAR-T is one.”

Alfonso Quintás Cardama

TCR² hopes to find a way to employ the full TCR — a goal that companies like bluebird bio, Kite (Gilead), and GSK all have their eye on.  But TCR²’s CMO Alfonso Quintás Cardama says the startup has a game-changing differentiator. “We are agnostic to HLA. That’s the advantage of our platform over any other TCR platform that requires specific HLA genotyping.”

TCR² has four programs in the pipeline, all of which are targeting cancers. Its lead investigational drug is called TC-210, a preclinical solid tumor therapy that targets mesothelin, an antigen present in several types of cancer. The company is hoping that drug can be used against ovarian cancer, mesothelioma, cholangiocarcinoma, and non-small cell lung cancer (NSCLC).

Its second program is basically TC-210 with a PD1 switch attached, which the company hopes will make the therapy more effective in lung cancer patients.

Its remaining two programs are still very early in their development, in either lead optimization or discovery stage. And TCR² isn’t saying much about either program, except that one is called Program X and the other will take on blood cancers.

Menzel said the massive Series B round will likely take two programs to proof-of-concept by 2021 and finance an expansion of the platform. TCR² plans to double its staff over the next year — from 30 to roughly 60 employees — all of whom will be working out of a brand new facility in the heart of Kendall Square.

“You’ll see us growing quite rapidly over the next year,” Menzel says.

With $125 million in the bank, we wouldn’t expect any less.


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