De­nali grabs an­oth­er megaround while ink­ing a flur­ry of neu­rode­gen­er­a­tion R&D pacts


South San Fran­cis­co-based up­start De­nali Ther­a­peu­tics has been busy. A lit­tle more than a year af­ter mak­ing a splash with its $217 mil­lion start­up round de­signed to fund a new breed of neu­rode­gen­er­a­tion drug de­vel­op­er, the biotech is back with an­oth­er megaround fi­nanc­ing and a string of deals topped by a move in­to the clin­ic for its lead drug.

De­nali is go­ing big, ear­ly on. The sec­ond chap­ter in De­nali’s sto­ry starts with a $130 mil­lion Se­ries B, bring­ing its to­tal close to $350 mil­lion. And it’s lin­ing up a Phase I study for a small mol­e­cule RIP1 in­hibitor tar­get­ing glial dys­func­tion, where De­nali hopes to start es­tab­lish­ing a track record for suc­cess against ALS and Alzheimer’s.

Start­ing from scratch, the team at De­nali — large­ly ex-Genen­tech staffers who have struck out on their own — has set out to build a com­pa­ny that they be­lieve can suc­ceed af­ter many of the gi­ants in the in­dus­try have paid heav­i­ly for more than a decade of fail­ure.

“We’ve looked at part­ner­ing as a means to build­ing the port­fo­lio,” Chief Op­er­at­ing Of­fi­cer Alex Schuth tells me, high­light­ing a first set that in­cludes two fo­cused on con­quer­ing the blood-brain bar­ri­er, which has thrown a host of ear­li­er drugs off tar­get. Here they are, in se­quence:

  • De­nali has ac­quired San Diego-based In­cro Phar­ma­ceu­ti­cals, a vir­tu­al, sin­gle-as­set af­fair that de­liv­ers a RIP1 drug out of Har­vard. And just days ago the biotech filed a tri­al ap­pli­ca­tion with Eu­ro­pean of­fi­cials with plans to start hu­man test­ing, con­cen­trat­ing on a ki­nase that reg­u­lates in­flam­ma­to­ry sig­nal­ing.

  • They struck a deal with their al­ma mater Genen­tech to de­vel­op and com­mer­cial­ize LRRK2 in­hibitors for the treat­ment of Parkin­son’s dis­ease.

  • There’s an­oth­er pact with Wash­ing­ton Uni­ver­si­ty School of Med­i­cine in St. Louis for the de­vel­op­ment and com­mer­cial­iza­tion of an­ti­bod­ies tar­get­ing ApoE, a big tar­get for Alzheimer’s.

  • Cam­bridge, UK-based F-star, mean­while, is bring­ing its bis­pe­cif­ic an­ti­body de­vel­op­ment ex­per­tise to the ta­ble, as De­nali looks to break through the blood-brain bar­ri­er. That deal in­cludes an op­tion to buy out a new­ly formed group for $450 mil­lion, with an ear­ly-stage trig­ger on the de­ci­sion.

  • Seat­tle-based Blaze Bio­science, mean­while, is work­ing on some ther­a­peu­tics that F-star’s bis­pecifics can hus­tle across the BBB.

There’s more. Deals have been signed with the ALS Ther­a­py De­vel­op­ment In­sti­tute (ALS TDI), Ap­tu­it, Evotec, Mass­a­chu­setts Gen­er­al Hos­pi­tal, The Michael J. Fox Foun­da­tion, Pa­tients­LikeMe and the Uni­ver­si­ty of Cal­i­for­nia San Diego School of Med­i­cine.

The staff at De­nali, mean­while, has swelled to 80, says CEO Ryan Watts, who adds that that num­ber will con­tin­ue to grow as the biotech signs up with more col­lab­o­ra­tors and builds its first 10 pro­grams for the clin­ic.

Chief Med­ical Of­fi­cer Ca­r­ole Ho says she’s been re­view­ing hun­dreds of pa­pers and some 80 failed stud­ies in this field to prep for the com­ing de­vel­op­ment work, look­ing to avoid the same pit­falls.

“This may sounds like Drug 101,” she says, but De­nali’s suc­cess af­ter so many fail­ures will get down to its abil­i­ty to en­gage the tar­get, with the right kind of bio­mark­ers in place to track their suc­cess. De­vel­op­ing bio­mark­ers ear­ly, she adds, is crit­i­cal. And the bi­ol­o­gy of these dis­eases is be­com­ing more clear through the rapid ad­vance of ge­net­ics re­search.

RIP1, ApoE and LRRK2 have nev­er re­al­ly been test­ed be­fore, adds the CEO, giv­ing De­nali a “much bet­ter start­ing point.”

The deal with F-star starts small, but could wind up in the big leagues. De­nali is pay­ing $6 mil­lion to get a new op­er­a­tion dubbed F-star Gam­ma off the ground, F-star CEO John Hau­rum tells me. De­nali will al­so fund the re­search work, head­ing to a cross­roads where De­nali can ei­ther pick up an op­tion to buy the op­er­a­tion for $450 mil­lion or ink a li­cens­ing pact for the rights to its bis­pecifics. The op­tion de­ci­sion falls ahead of Phase I, says Hau­rum, and if the biotech choos­es to go the li­cens­ing route, the mile­stones could add up to more than $1 bil­lion.

This isn’t the first of these kinds of deals for F-star, which has col­lab­o­ra­tions un­der­way with Bris­tol-My­ers Squibb and Ab­b­Vie. Hau­rum’s been im­pressed with the De­nali crew, which came to him af­ter de­cid­ing that F-star’s abil­i­ty to cre­ate both bis­pe­cif­ic as well as bi­va­lent an­ti­bod­ies gave it the best shot at hit­ting the tar­gets lined up once they get through the blood-brain bar­ri­er — a ma­jor ob­sta­cle in neu­rode­gen­er­a­tive re­search work.

“They bring as­pects of the Genen­tech cul­ture that every­one has re­spect­ed for years,” says Hau­rum.

Bail­lie Gif­ford, a UK-based mu­tu­al fund, led the round, with all of De­nali’s orig­i­nal in­vestors com­ing back in along with some un­named in­sti­tu­tion­al in­vestors. The found­ing in­vestors in­clude ARCH Ven­ture Part­ners, F-Prime Bio­sciences, Flag­ship Ven­tures and the Alas­ka Per­ma­nent Fund.

The in­ten­tion here is to get the right syn­di­cate to­geth­er to back a com­pa­ny that has years of ex­pen­sive re­search work ahead be­fore it can es­tab­lish a clear proof-of-con­cept case that its on the right track, says CFO Steve Krognes.

So is an IPO in sight? De­nali’s ex­ec­u­tive team will on­ly say that it has plen­ty of re­sources at this stage, and more than enough of time to con­sid­er all the ways to con­tin­ue to fund the work, whether that means more mon­ey from the syn­di­cate, an IPO at some point, or a part­ner­ship or two with a ma­jor al­ly that could al­so sup­port their work.

The way they’re go­ing, De­nali may take every­thing on the ta­ble.

Dave Barrett, Brian Chee, Amir Nashat, Amy Schulman. Polaris

Bob Langer's first port of call — Po­laris Part­ners — maps $400M for ninth fund

Health and tech ven­ture group Po­laris Part­ners, which counts Alec­tor, Al­ny­lam and Ed­i­tas Med­i­cine as part of its port­fo­lio, is set­ting up its ninth fund, rough­ly two years af­ter it closed Po­laris VI­II with $435 mil­lion in the bank, sur­pass­ing its tar­get by $35 mil­lion.

The Boston-based firm, in an SEC fil­ing, said it in­tends to raise $400 mil­lion for the fund. Po­laris — which rou­tine­ly backs com­pa­nies mold­ed out of the work done in the lab of pro­lif­ic sci­en­tist Bob Langer of MIT  — typ­i­cal­ly in­vests ear­ly, and sticks around till com­pa­nies are in the green. Like its peers at Flag­ship and Third Rock, Po­laris is all about cham­pi­oning the lo­cal biotech scene with a steady flow of start­up cash.

Partners Innovation Fund

David de Graaf now has his $28.5M launch round in place, build­ing a coen­zyme A plat­form in his lat­est start­up

Long­time biotech ex­ec David de Graaf has the cash he needs to set up the pre­clin­i­cal foun­da­tion for his coen­zyme A me­tab­o­lism com­pa­ny Comet. A few high-pro­file in­vestors joined the ven­ture syn­di­cate to sup­ply Comet with $28.5 mil­lion in launch mon­ey — enough to get it two years in­to the plat­form-build­ing game, with­in knock­ing dis­tance of the clin­ic.

Canaan jumped in along­side ex­ist­ing in­vestor Sofinno­va Part­ners to co-lead the round, with par­tic­i­pa­tion by ex­ist­ing in­vestor INKEF Cap­i­tal and new in­vestor BioIn­no­va­tion Cap­i­tal.

A new num­ber 1 drug? Keytru­da tapped to top the 10 biggest block­busters on the world stage by 2024

Analysts may be fretting about Keytruda’s longterm prospects as a host of rival therapies elbow their way to the market. But the folks at Evaluate Pharma are confident that last year’s $7 billion earner is headed for glory, tapping it to beat out the current #1 therapy Humira as AbbVie watches that franchise swoon over the next 5 years.

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John Chiminski, Catalent CEO - File Photo

'It's a growth play': Catal­ent ac­quires Bris­tol-My­er­s' Eu­ro­pean launch pad, ex­pand­ing glob­al CD­MO ops

Catalent is staying on the growth track.

Just two months after committing $1.2 billion to pick up Paragon and take a deep dive into the sizzling hot gene therapy manufacturing sector, the CDMO is bouncing right back with a deal to buy out Bristol-Myers’ central launchpad for new therapies in Europe, acquiring a complex in Anagni, Italy, southwest of Rome, that will significantly expand its capacity on the continent.

There are no terms being offered, but this is no small deal. The Anagni campus employs some 700 staffers, and Catalent is planning to go right in — once the deal closes late this year — with a blueprint to build up the operations further as they expand on oral solid, biologics, and sterile product manufacturing and packaging.

This is an uncommon deal, Catalent CEO John Chiminski tells me. But it offers a shortcut for rapid growth that cuts years out of developing a green fields project. That’s time Catalent doesn’t have as the industry undergoes unprecedented expansion around the world.

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The top 10 block­buster drugs in the late-stage pipeline — Eval­u­ate adds 6 new ther­a­pies to heavy-hit­ter list

Vertex comes in for a substantial amount of criticism for its no-holds-barred tactical approach toward wresting the price it wants for its commercial drugs in Europe. But the flip side of that coin is a highly admired R&D and commercial operation that regularly wins kudos from analysts for their ability to engineer greater cash flow from the breakthrough drugs they create.

Both aspects needed for success in this business are on display in the program backing Vertex’s triple for cystic fibrosis. VX-659/VX-445 + Tezacaftor + Ivacaftor — it’s been whittled down to 445 now — was singled out by Evaluate Pharma as the late-stage therapy most likely to win the crown for drug sales in 5 years, with a projected peak revenue forecast of $4.3 billion.

The latest annual list, which you can see here in their latest world preview, includes a roster of some of the most closely watched development programs in biopharma. And Evaluate has added 6 must-watch experimental drugs to the top 10 as drugs fail or go on to a first approval. With apologies to the list maker, I revamped this to rank the top 10 by projected 2024 sales, instead of Evaluate's net present value rankings.

It's how we roll at Endpoints News.

Here is a quick summary of the rest of the top 10:

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In­vestor day prep at Mer­ck in­cludes a new strat­e­gy to pick up the pace on M&A — re­port

Mer­ck’s re­cent deals to buy up two bolt-on biotechs — Ti­los and Pelo­ton — weren’t an aber­ra­tion. In­stead, both ac­qui­si­tions mark a new strat­e­gy to beef up its dom­i­nant can­cer drug op­er­a­tions cen­tered on Keytru­da while look­ing to ad­dress grow­ing con­cerns that too many of its eggs are in the one I/O bas­ket for their PD-1 pro­gram. And Mer­ck is go­ing af­ter more small- and mid-sized buy­outs to calm those fears.

Right back at you, Pfiz­er: BeiGene and a Pfiz­er spin­out launch a new­co to de­vel­op a MEK/BRAF in­hibitor that could ri­val $11.4B com­bo

A day af­ter Pfiz­er bought Ar­ray and its ap­proved can­cer com­bo, BeiGene and Pfiz­er spin­out Spring­Works have part­nered in launch­ing a new biotech that has an eye on the very same mar­ket the phar­ma gi­ant just paid bil­lions for. And they’re plan­ning on us­ing an ex-Pfiz­er drug to do it.

In a nut­shell, Chi­na’s BeiGene is toss­ing in a pre­clin­i­cal BRAF in­hibitor — BGB-3245, which cov­ers both V600 and non-V600 BRAF mu­ta­tions — for a big stake in a new, joint­ly con­trolled biotech called Map­Kure with Bain-backed Spring­Works.

Step­ping on Roche's toes, Mer­ck cuts in­to SCLC niche with third-line Keytru­da OK

In the in­creas­ing­ly crowd­ed check­point race, small cell lung can­cer has been a rare area where Roche, a sec­ond run­ner-up, has a lead over the en­trenched lead­ers Mer­ck and Bris­tol-My­ers Squibb. But Mer­ck is fi­nal­ly mak­ing some head­way in that di­rec­tion with the lat­est ap­proval for its PD-1 star.

The lat­est green light en­dors­es Keytru­da in the third-line treat­ment of metasta­t­ic SCLC, where it would be giv­en to pa­tients whose dis­ease ei­ther don’t re­spond to or re­lapse af­ter chemother­a­py, which would have fol­lowed at least one pri­or line of ther­a­py.

Sanofi aligns it­self with Google to stream­line drug de­vel­op­ment

Tech­nol­o­gy is bleed­ing in­to health­care, and big phar­ma is rid­ing the wave. Sanofi $SNY ap­point­ed its first chief dig­i­tal of­fi­cer this Feb­ru­ary, fol­low­ing the foot­steps of its peers. By May, the French drug­mak­er and some of its big phar­ma com­pa­tri­ots joined forces with Google par­ent Al­pha­bet’s Ver­i­ly unit to aug­ment clin­i­cal tri­al re­search. On Tues­day, the Parisian com­pa­ny tied up with Google to ac­cess its cloud com­put­ing and ar­ti­fi­cial in­tel­li­gence tech to spur the de­vel­op­ment of new ther­a­pies.