Arena's Amit Munshi spins out his neuro sub into a biotech startup, with $56M for the baptism
Back in January, Arena Pharma $ARNA CEO Amit Munshi turned up at JP Morgan with ambitious plans for 2020. Near the top of the to-do list was news that he was creating a new neuro subsidiary that would focus on microglial neuroinflammation.
Now, he’s taking the sub and spinning it out into a new biotech with $56 million in funding and a syndicate of its own to back up their work. And Munshi — who’s been successful running the market cap up to the $5 billion mark — will take his value from the 33% equity stake that Arena retains in the spinout.
“We have a really full plate,” Munshi tells me, with a slate of late-stage and mid-stage trials for the top pipeline drugs. “As you know, you can only scale a company so fast.”
The sub is being born today as Longboard Pharmaceuticals, with former CFO Kevin Lind as the new CEO. Lind and 2 others make up the current staff at the newborn biotech, and they’re planning to hire up, reaching the 15 to 25 mark in about a year.
I asked Lind if he was planning to move into new digs for the company.
“In a Covid environment,” he replied dryly, “it’s not really relevant.”
What is relevant is going after 3 programs in the most cost-effective manner possible. They are:
— LP352, a “next-generation,” clinical stage 5-HT2C agonist, in development for developmental and epileptic encephalopathies.
— Then there’s LP143, an agonist of the cannabinoid type 2 receptor, and LP659, a “centrally acting, next-generation, highly selective S1P receptor modulator.” Those two drugs are targeted at microglial neuroinflammatory diseases.
Farallon Capital Management joined Cormorant Asset Management, HBM Healthcare Investments, Highside Capital Management, and T. Rowe Price Associates, with participation from Arena, in the launch round.