Startups, Venture

Bill Gates and rich allies help fund an alt-biotech startup path for the gene expression experts at Exicure

Exicure CEO David Giljohann has been busy.

In the past couple of months, he’s rounded up two tranches of cash totaling $31.5 million from a growing band of backers, with Bill Gates coming back to join new, wealthy investor Fred Knoll in a syndicate that has strayed far off the typical startup funding path in biotech.

But that’s not his only divergence from the standard course. He’s executed a “clean” reverse merger with a completely empty shell to go out onto the OTC market — not Nasdaq. And, back in the norm, he’s followed up on his first round of Phase I data with plans to line up a series of Phase II studies to put his platform tech to a crucial test.

David Giljohann

“We started on a very different path,” acknowledges the CEO, “with highly educated tech investors who believe in” spherical nucleic acid nanotechnology.

Aside from Gates, the group includes Eric Lefkofsky, co-founder of Groupon, former Microsoft strategy chief Craig Mundie, the Rathmann Family Foundation, retired Aon CEO Patrick Ryan, Illumina co-founder David Walt as well as Mark Tompkins and Katalyst Securities. They’re all backing a public company now, though shares aren’t trading yet.

“We thought, given the investor base, this was a simpler way” to go public, Giljohann told me over the weekend about his OTC plans, after detailing the latest batch of $11.2 million to come through from his syndicate. “For us it was the best available option to take the company public.” The Nasdaq route was not available to them.

It hasn’t hurt having Bill Gates invest in each round. This new batch of investors includes Luye Pharma, a big Chinese group that has been spreading its wings in the US and Knoll Capital Investment, which manages a family fortune that wasn’t hurt at all after Pfizer bought out Medivation, where Knoll was one of the top 5 investors to cash out. And let’s not forget Eager Info Investments and Purple Arch Ventures, a group of Northwestern alum, happy to help support a biotech which emerged from the lab of Northwestern chemist Chad Mirkin.

Exicure has now raised a total of $75 million-plus, says the CEO. That money is being used to pursue the development of new therapies that start with an artificial nanosphere as a scaffold, assembling single- and double-stranded nucleic acids on the surface — creating a “third form” of nucleic acids designed to easily slip into cells without triggering an immune response.

The SNAs can use antisense or RNAi pathways to do their duty in regulating gene expression. And the company is putting it on the line first with skin cells.

There are three clinical stage programs.

  • AST-005 targets TNF for mild to moderate psoriasis. Purdue came in and partnered on it, with Phase I done and a Phase Ib wrapping soon.
  • XCUR 17 also targets psoriasis through an IL-17 receptor in the skin. Clinical trials begin in Q1 ’18.
  • Then there’s a TLR9 agonist — AST 008 — for solid tumors in combination with a checkpoint. A trial is slated to begin soon.

Going public puts them on the SEC’s map, where they’ll have to file all their financials. An initial 8K provides some insight into their partnership with Purdue, which signed a $780 million partnership on 005, where they are taking the lead on the clinical work. According to the filing, Purdue got that deal rolling with a modest $10 million up front, with the rest due in milestones.

The next big stage for Exicure involves some detailed Phase II data in some big diseases. Making a splash here won’t be easy. But it’s all been working so far.

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