CRISPR pi­o­neer Feng Zhang co-founds a 'lim­it­less' biotech up­start with big plans for speed­ing new drug de­vel­op­ment

One of the key sci­en­tif­ic play­ers in­volved in the emer­gence of the in­cred­i­bly buzzy gene edit­ing tech CRISPR/Cas9 is back­ing a biotech start­up called Ar­bor Biotech­nolo­gies in Cam­bridge, MA, which just un­veiled what it be­lieves is a new, more ver­sa­tile CRISPR tech.

In a pa­per pub­lished to­day in Mol­e­c­u­lar Cell, two for­mer mem­bers of Feng Zhang’s lab — David Scott and Win­ston Yan — out­lined their dis­cov­ery of an en­zyme called Cas13d, which they say is con­sid­er­ably small­er and bet­ter than the rest of the Cas13 fam­i­ly of en­zymes, giv­ing it greater po­ten­tial in RNA surgery. And their pa­per was pub­lished on the same day as a sep­a­rate study out of Salk which cen­tered on the ex­act same en­zyme.

The biotech came out of stealth mode to­day with a $15.6 mil­lion round, which we’ve been track­ing, and a plan to em­ploy the new CRISPR sys­tem with a plat­form drug de­vel­op­ment tech built around ar­ti­fi­cial in­tel­li­gence, genome se­quenc­ing, gene syn­the­sis and screen­ing ef­forts to go about the busi­ness of find­ing new mol­e­cules. Us­ing the new CRISPR sys­tem to char­ac­ter­ize pro­teins, the group plans to play a role in the on­go­ing in­te­gra­tion of com­pu­ta­tion­al sci­ence in drug dis­cov­ery, look­ing to short­en de­vel­op­ment time­lines and im­prove on some in­cred­i­bly bad fail­ure rates.

In a call with me late Thurs­day, Scott and David Cheng, founder of the search en­gine at Ar­bor, em­pha­sized that the new pa­per on Cas13d was done en­tire­ly in-house.

“All of this is whol­ly an ef­fort at Ar­bor,” says Scott. “Feng is a co-founder, he is in­volved, but he is not an au­thor of the study, that was whol­ly per­formed in-house” at the 2-year-old biotech.

From the sum­ma­ry of the new pa­per:

The small size, min­i­mal tar­get­ing con­straints, and mod­u­lar reg­u­la­tion of Cas13d ef­fec­tors fur­ther ex­pands the CRISPR toolk­it for RNA ma­nip­u­la­tion and de­tec­tion.

At the same time, re­searchers at the Salk In­sti­tute al­so un­veiled their sci­en­tif­ic work on Cas13d, us­ing it to tai­lor RNA rather than DNA, where CRISPR made its rep.

“CRISPR has rev­o­lu­tion­ized genome en­gi­neer­ing, and we want­ed to ex­pand the tool­box from DNA to RNA,” said Salk’s Patrick Hsu. And like Feng Zhang, he be­lieves that Cas13d en­zymes are per­fect­ly suit­ed for the job, with im­pli­ca­tions for dis­ease caused by tox­ic RNA or im­prop­er­ly spliced RNA, the mes­sen­gers that trans­late DNA in­to pro­teins. Dubbed Cas­Rx, they pack­aged it in a virus and used it to tar­get the tox­ic tau known to clus­ter in the brains of Alzheimer’s pa­tients. Aimed at neu­rons, it worked in cells grown from a pa­tients with neu­rode­gen­er­a­tive dis­or­der fron­totem­po­ral de­men­tia, re­bal­anc­ing tau lev­els.

David Scott

It will like­ly take years to prove if these young rev­o­lu­tion­ar­ies — and a host of col­leagues op­er­at­ing in AI — are right, but they al­ready have the rapt at­ten­tion of every drug de­vel­op­ment or­ga­ni­za­tion on the plan­et.

David Walt of Har­vard and the Wyss In­sti­tute and co-founder of Il­lu­mi­na and Quan­ter­ix is cred­it­ed as a co-founder with Zhang along with Scott and Yan, who both worked in Zhang’s MIT lab. And they are pumped about the sci­en­tif­ic po­ten­tial.

“Ar­bor’s rev­o­lu­tion­ary plat­form ac­cel­er­ates the rate of dis­cov­ery and char­ac­ter­i­za­tion of new bio­mol­e­cules by or­ders of mag­ni­tude,” said Scott in a state­ment.

Win­ston Yan

“We are now at the cusp of be­ing able to con­vert se­quence da­ta in­to a cat­a­log of pro­tein func­tions. The pos­si­bil­i­ties are lim­it­less,” not­ed Yan.

Zhang was the prin­ci­pal sci­en­tist be­hind the emer­gence of Ed­i­tas, one of the orig­i­nal gene edit­ing star­tups to hit fol­low­ing the emer­gence of CRISPR/Cas9, a tech that sev­er­al biotechs are us­ing to ed­it out dis­ease in genes.

Kei­th Cran­dell of ARCH Ven­ture Part­ners, An­nie Ha­zle­hurst of Fari­dan Ven­tures, and sev­er­al pri­vate in­vestors are cred­it­ed with the round.


Im­age: Feng Zhang. MIT

Brent Saunders [Getty Photos]

UP­DAT­ED: Ab­b­Vie seals $63B deal to buy a trou­bled Al­ler­gan — spelling out $1B in R&D cuts

Brent Saunders has found his way out of the current fix he’s in at Allergan $AGN. He’s selling the company to AbbVie for $63 billion in the latest example of the hot M&A market in biopharma.

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Richard Gonzalez testifying in front of Senate Finance Committee, February 2019 [AP Images]

Ab­b­Vie's $63B buy­out spot­lights the re­turn of ma­jor M&A deals — de­spite the back­lash

Big time M&A is back. But for how long?

Over the past 18 months we’ve now seen three ma­jor buy­outs an­nounced: Take­da/Shire; Bris­tol-My­ers/Cel­gene and now Ab­b­Vie/Al­ler­gan. And with this lat­est deal it’s in­creas­ing­ly clear that the sharp fall from grace suf­fered by high-pro­file play­ers which have seen their share prices blast­ed has cre­at­ed an open­ing for the growth play­ers in big phar­ma to up their game — in sharp con­trast to the pop­u­lar bolt-on deals that have been dri­ving the growth strat­e­gy at No­var­tis, Mer­ck, Roche and oth­ers.

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SQZ, Ery­tech kick off $57M cell ther­a­py part­ner­ship; Jean-Paul Kress lands new CEO gig at Mor­phoSys

→ In a mar­riage of two tech­nolo­gies meant to make cell ther­a­pies more pow­er­ful, SQZ Biotech is team­ing up with France’s Ery­tech Phar­ma for a col­lab­o­ra­tion, with $57 mil­lion re­served for the first project and $50 mil­lion for each sub­se­quent ap­proval (prod­uct or in­di­ca­tion). Hav­ing ac­cess to Ery­tech’s method of fash­ion­ing ther­a­peu­tics from red blood cells, the Cam­bridge, MA-based com­pa­ny said, will am­pli­fy SQZ’s cell en­gi­neer­ing ca­pa­bil­i­ties and al­low them to de­vleop a new class of im­munomod­u­la­to­ry ther­a­pies. Its own tech — so far ap­plied in can­cer but al­so has po­ten­tial in di­a­betes — tem­po­rary dis­rupts the cell mem­brane by squeez­ing the cell, thus cre­at­ing a brief win­dow for tar­get ma­te­ri­als such as anti­gens to en­ter.

UP­DAT­ED: In sur­prise switch, Bris­tol-My­ers is sell­ing off block­buster Ote­zla, promis­ing to com­plete Cel­gene ac­qui­si­tion — just lat­er

Apart from revealing its checkpoint inhibitor Opdivo blew a big liver cancer study on Monday, Bristol-Myers Squibb said its plans to swallow Celgene will require the sale of blockbuster psoriasis treatment Otezla to keep the Federal Trade Commission (FTC) at bay.

The announcement — which has potentially delayed the completion of the takeover to early 2020 — irked investors, triggering the New York-based drugmaker’s shares to tumble Monday morning in premarket trading.

Celgene’s Otezla, approved in 2014 for psoriasis and psoriatic arthritis, is a rising star. It generated global sales of $1.6 billion last year, up from the nearly $1.3 billion in 2017. Apart from the partial overlap of Bristol-Myers injectable Orencia, the company’s rival oral TYK2 psoriasis drug is in late-stage development, after the firm posted encouraging mid-stage data on the drug, BMS-986165, last fall. With Monday’s decision, it appears Bristol-Myers is favoring its experimental drug, and discounting Otezla’s future.

The move blindsided some analysts. Credit Suisse’s Vamil Divan noted just days ago:

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Novotech CEO Dr. John Moller

Novotech CRO Award­ed Frost & Sul­li­van Best Biotech CRO Asia-Pa­cif­ic 2019

Known in the in­dus­try as the Asia-Pa­cif­ic CRO, Novotech is now lead CRO ser­vices provider for the grow­ing num­ber of in­ter­na­tion­al biotechs se­lect­ing the re­gion for their stud­ies.

Re­flect­ing this Asia-Pa­cif­ic growth, Novotech staff num­bers are up 20% since De­cem­ber 2018 to 600 in-house clin­i­cal re­search peo­ple across a full range of ser­vices, across the re­gion.

Novotech’s ca­pa­bil­i­ties have been rec­og­nized by an­a­lysts like Frost & Sul­li­van, most re­cent­ly with the pres­ti­gious Asia-Pa­cif­ic CRO Biotech of the year award for best prac­tices in clin­i­cal re­search for biotechs for the fifth year. See oth­er awards here.

FDA re­jects Ac­er's rare dis­ease drug, asks for new tri­al — shares crater

Ac­er Ther­a­peu­tics’ bid to re­pur­pose celipro­lol — a be­ta-block­er on the mar­ket for hy­per­ten­sion — as a treat­ment for a rare, in­her­it­ed con­nec­tive tis­sue dis­or­der has hit a se­vere set­back. The New­ton, Mass­a­chu­setts-based com­pa­ny on Tues­day said the FDA re­ject­ed the drug and has asked for an­oth­er clin­i­cal tri­al.

The com­pa­ny’s shares $AC­ER cratered near­ly 77% to $4.47 in Tues­day morn­ing trad­ing.

Tasly Bio­phar­ma pitch­es long-await­ed IPO — will it trig­ger an­oth­er $1B gold rush on HKEX?

In the run up to the Hong Kong stock ex­change’s an­tic­i­pat­ed rule change — open­ing the door for Chi­nese pre-rev­enue biotechs to go pub­lic clos­er to home — more than a year ago, Tasly Bio­phar­ma was one of the big play­ers whose ru­mored in­ter­est helped stoke en­thu­si­asm for the new list­ing venue. The com­pa­ny has since kept the drum­roll rum­bling in the back­ground, rais­ing a pre-IPO round and con­vinc­ing part­ner Trans­gene to swap own­er­ship in a joint ven­ture for eq­ui­ty. Now the oth­er shoe has fi­nal­ly dropped as ex­ecs out­line plans for a pipeline dom­i­nat­ed by car­dio­vas­cu­lar drugs.

With 4 more biotech IPOs due to wrap up Q2, how is the class of 2019 far­ing?

With 22 biotech IPOs on the books and four more set to price in the last week of June, in­vest­ment ad­vis­er Re­nais­sance Cap­i­tal has tak­en the pulse of the re­cent rush.

By the IPO ex­perts’ count, 25 out of 32 health­care of­fer­ings this year have been from biotechs — dif­fer­ing slight­ly from Brad Lon­car’s tal­ly — and the over­all pic­ture is one of un­der­per­for­mance. While they av­er­aged a first-day re­turn of 9.0%, col­lec­tive­ly they have trad­ed down to a 5.9% re­turn. Turn­ing Point $TP­TX and Cor­texyme $CRTX emerged on top at the half-year mark, ris­ing 135% and 109% re­spec­tive­ly.

Eye­ing a $500M peak sales pot, Almi­rall dou­bles down on le­brik­izum­ab as Der­mi­ra lines up PhI­II

With eyes on what it be­lieves is a $500 mil­lion peak rev­enue op­por­tu­ni­ty in Eu­rope, Barcelona-based Almi­rall has stepped up with $50 mil­lion in cash to take up the op­tion on Der­mi­ra’s IL-13 an­ti-in­flam­ma­to­ry drug le­brik­izum­ab just ahead of the start of Phase III. And there’s an­oth­er $30 mil­lion due as the late-stage pro­gram gets geared up.

That shouldn’t be long from now, as Der­mi­ra ex­pects to be­gin the late-stage tri­al work for atopic der­mati­tis be­fore the end of this year as it fol­lows a trail that ex­ecs in­sist leads to block­buster re­turns. Along the way, they’ll need to take on the 600-pound go­ril­la in atopic der­mati­tis: the IL-13/IL-4 drug Dupix­ent, from Re­gen­eron and Sanofi. Ri­vals al­so in­clude Leo Phar­ma, in its piv­otal with tralok­izum­ab, and Anap­tys­Bio in the hunt with a mid-stage pro­gram for etokimab, pre­vi­ous­ly re­ferred to as ANB020.