Jon Edwards (L) and Heath Lukatch (Red Tree)

Cal­i­for­nia dream­in': Red Tree VC shop takes Boston fund­s' spin­out ap­proach to West Coast

The leaves are brown, the tem­per­a­ture is warm and Red Tree Ven­ture Cap­i­tal is dream­ing of Cal­i­for­nia — and some oth­er West Coast states as well.

The VC firm is out with its first fund, two years in the mak­ing and of­fi­cial­ly wrapped up in June, to bankroll at least a dozen biotechs and med­ical de­vice star­tups for which the cap­i­tal de­ploy­er wants to be the first in­sti­tu­tion­al backer.

Named af­ter its co-founder’s Stan­ford roots and the team’s love for the out­doors, Red Tree wants to repli­cate the uni­ver­si­ty spin­out ap­proach that has ce­ment­ed the biotech cre­ation blue­print for Boston funds like Third Rock, Po­laris, At­las and Flag­ship, man­ag­ing part­ner Heath Lukatch told End­points News in a pre­view of the Thurs­day un­veil­ing.

Ex­cept Red Tree’s sights are set on its aca­d­e­m­ic neigh­bors in San Fran­cis­co, Los An­ge­les, San Diego and else­where across the West Coast, in­clud­ing Seat­tle.

Jen­nifer Cochran

Lukatch found­ed the firm with chief sci­en­tif­ic ad­vi­sor Jen­nifer Cochran, and the duo brought on board for­mer Medicxi part­ner Jon Ed­wards as man­ag­ing di­rec­tor. “I pinged my trust­ed net­work,” Lukatch said, and a CEO friend con­nect­ed the two.

“I’ve spent a lot of time in­vest­ing ear­ly, putting com­pa­nies to­geth­er and just saw the op­por­tu­ni­ty and thought it was a once-in-a-life­time chance to be able to help cre­ate a new fund and build the team out to­geth­er,” Ed­wards said in an in­ter­view with Lukatch.

Red Tree has al­ready backed 10 com­pa­nies, in­clud­ing clin­i­cal-stage Pipeline Ther­a­peu­tics, and the goal is to fund at least an­oth­er two with the ini­tial pool of $272 mil­lion. The VC’s lead­ers will hit the road for fund two next year, Lukatch said.

Cochran, who chairs the bio­engi­neer­ing de­part­ment at Stan­ford, said Red Tree is “par­tic­u­lar­ly proud” that more than half of its in­vest­ments to date have been in com­pa­nies with fe­male founders and/or CEOs.

Check sizes range from a cou­ple hun­dred thou­sand dol­lars to $15 mil­lion, with Red Tree aim­ing to in­vest about $20 mil­lion to $30 mil­lion over the span of their fi­nan­cial re­la­tion­ship with each port­fo­lio com­pa­ny, Lukatch said. The goal is to fo­cus on on­col­o­gy, neu­rol­o­gy and im­munol­o­gy, the man­ag­ing part­ner said, not­ing those ar­eas have gar­nered a ma­jor­i­ty of M&A and IPO ex­its in re­cent years, as well as FDA nods.

“We like to take the teams out and repli­cate it as quick­ly as pos­si­ble and re­al­ly do the ini­tial de-risk­ing in a fair­ly vir­tu­al way and scal­ing these com­pa­nies as the da­ta has earned that cap­i­tal,” Ed­wards said, “and then we look to go syn­di­cate these com­pa­nies with our friends, oth­er great ear­ly-stage in­vestors and re­al­ly turn the hu­man clin­i­cal da­ta card.”

The port­fo­lio’s spread in­cludes about 70% seed-stage and ear­ly-clin­i­cal com­pa­nies, and the oth­er 30% in late-clin­i­cal or ear­ly-com­mer­cial­iza­tion phas­es, with the lat­ter main­ly com­ing from the med­ical de­vice in­vest­ments, Lukatch ex­plained. Biotech rep­re­sents about three in four in­vest­ments, with the re­main­der in med­ical de­vices.

Red Tree’s in­vest­ments to date in­clude: gene edit­ing shop Acrigen Bio­sciences; brain mon­i­tor mak­er Ceri­bell; food al­ler­gy-fo­cused Al­ladapt Im­munother­a­peu­tics; small mol­e­cule drug­mak­er Sar­dona Ther­a­peu­tics and oth­ers.

While at Medicxi, Ed­wards was on the board of mul­ti­ple com­pa­nies, in­clud­ing Xenikos, Phath­om, Pal­la­dio, Cel­gene-ac­quired Im­pact Bio­med­i­cines and oth­ers, in­clud­ing serv­ing a short stint as board ob­serv­er at Check­mate Phar­ma­ceu­ti­cals, which Re­gen­eron bought ear­li­er this year.

Lukatch was pre­vi­ous­ly a part­ner at PE firm TPG and has served on the boards of more than a dozen com­pa­nies.

Vac­cine doc­u­ments, young lead­ers and mar­ket tur­moil: End­points' 10 biggest sto­ries of 2022

It’s been a volatile year in the world of biopharma. Market declines reset M&A valuations, and may be beginning to tempt bigger buyers back into dealmaking. Russia’s war in Ukraine disrupted drug sales and clinical trials. A new generation of young biotech leaders emerged in the Endpoints 20(+1) Under 40. And as capital runs dry in a tough environment for raising new funds, companies big and small are taking a look at their headcounts and operations for ways to make it through lean times.

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Tom Riga, Spectrum Pharmaceuticals CEO

Spec­trum im­plodes af­ter a harsh pub­lic slap­down and now a CRL from Richard Paz­dur

The FDA has gone out of its way several times to flatten any expectations for Spectrum’s lung cancer drug poziotinib, including slamming the regulatory door in the biotech’s face four years ago when the their executive crew came calling for a breakthrough drug designation and encouragement from the oncology wing of the FDA.

That stinging early rebuke pointed straight down the path to a corrosive in-house agency review of Spectrum’s attempt to land an accelerated approval for the oral EGFR TKI and a public whipping that included a classic takedown by none other than Richard Pazdur, who slammed the company for “poor drug development” that led to confusion over the dose needed for a slice of NSCLC patients harboring HER2 exon 20 insertion mutations.

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Big Phar­ma's Twit­ter ex­o­dus; Mer­ck wa­gers $1.35B on buy­out; $3.5M gene ther­a­py; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

As you start planning for #JPM23, we hope you will consider joining Endpoints News for our live and virtual events. For those who are celebrating Thanksgiving, we hope you are enjoying the long weekend with loved ones. And if you’re not — we’ll see you next week!

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Albert Bourla, Pfizer CEO (John Thys/POOL/AFP via Getty Images)

Pfiz­er CEO un­der fire from UK watch­dog over vac­cine com­ments — re­port

Pfizer CEO Albert Bourla told the BBC last December that he had “no doubt in my mind that the benefits, completely, are in favor” of vaccinating 5- to 11-year-olds for Covid-19. Almost a year later, those comments have reportedly landed him in trouble with a UK pharma watchdog.

Children’s advocacy group UsForThem filed a complaint with the UK’s Prescription Medicines Code of Practice Authority (PMCPA) last year accusing Bourla of making “disgracefully misleading” statements during the BBC interview, including one that “Covid in schools is thriving.” At the time, UK regulators had not yet cleared the vaccine for the 5 to 11 age group, though the vaccine did have a positive opinion from the EMA’s human medicines committee.

Sanofi's new headquarters, La Maison Sanofi, in Paris (Credit: Luc Boegly)

Sanofi wel­comes 500 staffers to new Paris HQ af­ter €30M ren­o­va­tion

When Paul Hudson took the helm at Sanofi back in 2019, he promised to reinvent the pharma giant — including its Paris headquarters. This week, the company set up shop in new “state-of-the-art” digs.

La Maison Sanofi, as the new HQ is called, is officially open for business, Hudson announced on Monday. The 9,000-square-meter (just under 97,000-square-foot) space accommodates 500 employees across the company’s government and global support functions teams, including finance, HR, legal and corporate affairs — and it was built with environmental sustainability and hybrid work in mind.

Sta­da to place $50M+ in­vest­ment in a new fa­cil­i­ty in Ro­ma­nia

While Romania may conjure up images of vast mountain ranges and tales of medieval kings, one generic manufacturer has broken ground on a new facility there.

German pharma company Stada said Monday that it has placed a €50 million ($51.9 million) investment into a 100,000 square-meter (1.08 million square-foot) site in Turda, Romania, a city in the Southeast of the country. According to a Stada spokesperson in an email to Endpoints News, the company has developed only 281,500 square feet of the site so far.

Rachael Rollins (Charles Krupa/AP Images)

US seeks jail time for co-CEO of New Eng­land com­pound­ing cen­ter af­ter dead­ly 2012 fun­gal out­break

The US attorney for the district of Massachusetts late last week called on the state’s district court to sentence the former co-owner of the now-defunct New England Compounding Center to 18 months of jail time for his role in the center’s quality deviations that led to more than 100 people dead from a fungal meningitis outbreak.

Gregory Conigliaro was convicted of conspiring with more than a dozen others at NECC to deceive the FDA and misrepresent the fact that the center was only dispensing drugs pursuant to patient-specific prescriptions.

FDA tells Catal­ent to fix is­sues at two man­u­fac­tur­ing sites on its own

The CDMO Catalent will have to fix issues at two manufacturing plants in the US and Europe that were subject to inspections by the FDA this summer, giving the company room to correct the issues without facing further regulatory action.

The FDA gave Catalent a “voluntary action indicated” response to two inspections at the contract manufacturer’s site in Bloomington, IN, and Brussels, Belgium. Fixing the issues on its own is a preferable outcome to facing an “official action indicated” response, meaning that an official warning would be sent out or a sit-down with the FDA would be required.

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Merck targets vaccine-hesitant parents in its latest 'Why Vaccines' campaign. (Image: Shutterstock)

Mer­ck­'s lat­est 'Why Vac­ci­nes' cam­paign seeks to bet­ter in­form vac­cine-hes­i­tant moms

From Hollywood couple endorsements to targeted equity efforts, Merck has been pushing the value of vaccinations, especially since the Covid-19 pandemic disruption. Now the pharma is turning to a new target — vaccine-hesitant parents, and moms in particular.

Merck’s “Why Vaccines” latest social media and digital campaign spotlights real-life new moms who have questions about vaccinating their children.

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