Anyone looking for solid evidence of the kind of impact the new, flush funding environment — along with a more accommodating FDA — is having on biotech need look no further than Galera Therapeutics this morning.
Armed with positive Phase IIb data for a new cancer-related therapy, the small, 18-person crew at Galera has pieced together a whopping $150 million raise; $70 million in an ambitious Series C with an $80 million royalty deal coming from one of its biggest backers. And CEO Mel Sorensen says that combo gives the company all the money it needs to get through a pivotal study in the next couple of years that could put them on the threshold of a marketing decision from the FDA.
“This funding allows us to get all the way through the process,” Sorensen tells me, “to turn over the Phase III card.”
The “beachhead” indication for Malvern, PA-based Galera is severe oral mucositis, a common side effect in patients with head and neck cancer. Their drug, GC4419, targets the toxic effect of radiation therapy as superoxide swiftly builds up in patients, afflicting the sensitive tissue in their mouths.
The FDA has helped considerably, giving Galera a breakthrough drug designation and getting the CEO’s thumbs up for helping with the trial design and keeping things on a relatively tight schedule. Sorensen expects to get the pivotal Phase III underway in the upcoming quarter, and he adds that it will likely take approximately 18 to 24 months to complete once they are underway.
At one point not long ago, the idea of a small biotech company tackling Phase III without at least a major partner would have terrified most investors. But times have changed, and the level of cash flowing through the industry in the last 2 years has reached an unprecedented depth. In Galera’s case, that means pushing through Phase III while also laying the foundation for a commercialization effort that could require 50 people. Along the way, Galera will also study new indications for their drug to see how they can build the franchise.
Presumably, an IPO has been on the table, especially as the current wave of biotechs going public is dominated by preclinical companies without anything like a Phase IIb data set. Sorensen, though, simply says the company is keeping all options on the table, preferring to focus now on the big step ahead.
In this case, Clarus not only led the round, the firm also supplied the royalty cash through another specialized fund it runs.
Clarus is jumping in alongside other new investors: Adage Capital Management, HBM Healthcare Investments, Nan Fung Life Sciences, RA Capital, Rock Springs Capital and Tekla Capital Management LLC. Existing investors Correlation Ventures, Galera Angels, New Enterprise Associates, Novartis Venture Fund, Novo Ventures and Sofinnova Ventures also participated. And Clarus’ managing director Emmett Cunningham is jumping on the board.
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