Eli Lilly-backed Lycia fuels up on VC cash in a discovery drive toward protein degradation 2.0
Just weeks after nabbing a marquee alliance with Eli Lilly, the pharma giant has come back to support a $70 million B round for Lycia Therapeutics designed to fund the next stage of discovery at the protein degradation player.
Founder Versant Ventures also came back to add to the round, joining new investors Redmile Group, Cowen Healthcare Investments, Invus, RTW Investments, LP, Eli Lilly and Alexandria.
“I hope that [the $70 million] will get us to a few development candidates. So it will really progress us and support us over these next few years,” Lycia CEO Aetna Wun Trombley told Endpoints News.
As part of their partnership with Eli Lilly, the South San Francisco-based biotech will focus primarily on 2 indications – immunology and pain, with the potential of going after 5 targets in those two indications.
But what exactly does the company do, and how did they land a deal with Lilly worth potentially $1.6 billion? The company is not entirely that large either, with about 20 employees currently and plans to bring that up to 25 by year’s end.
The answer lies in protein degradation – specifically extracellular degradation as highlighted by Stanford chemical biologist Carolyn Bertozzi in 2019.
Companies started looking at protein degradation within the last decade as a way to tackle things that antibodies or inhibitors could not do. Companies started launching in 2013 to utilize protein degradation via proteolysis, limiting themselves to proteins within cell structures.
When Bertozzi published a preprint in 2019 on the possibility of degrading extracellular proteins via lysosomes, venture company Versant Ventures immediately threw its weight behind Bertozzi, going almost immediately into the lab and working with subsidiary Inception Sciences to verify and replicate her work.
That preprint ultimately launched Lycia out of stealth with $50 million raised in a Series A last year.
“In July 2019, I remember she [Carolyn] came down to Inception and she gave a seminar, and we had a multi-hour brainstorming about targets, and the Inception team immediately started getting going on some of the initial chemistry,” Lycia board member Clare Ozawa told Endpoints. She went on to emphasize that Versant — through Inception — was able to independently replicate Bertozzi’s work in a matter of a few weeks. They started out with a group of scientists from Inception to work on this platform.
Lycia’s technology centers around LYTACs, or lysosome-targeting chimeras, rather than PROTACs, also known as proteolysis targeting chimeras. The main difference between these two technologies is what degrading mechanism is used — for PROTACs, bifunctional small molecules tether a protein of interest at one end, and at the other end bind to an E3 ligase, a member of a family of several hundred proteins that kick off that intracellular process.
For LYTACs, Bertrozzi’s work uses a glycan-antibody construct to connect cellular surfaces to the liposome via a CI-M6PR receptor. The main improvement is that LYTACs are able to go after an additional 40% of potential target proteins.
It’s still early days for Lycia and for the protein degradation field as a whole, which has been hot in the last few years. But the investors behind the company believe that some of the clinical programs now underway at other biotechs could offer some key validation for their approach, as they wind up a degradation 2.0 effort to take the science another big step forward.