Last November, Magenta Therapeutics ended a year of self-imposed startup silence with a hefty $48.5 million Series A and a burgeoning team of investigators focused on cord blood stem cell therapies. Today, just a little more than 5 months later, it’s adding $50 million in Series B cash from some marquee investors that includes the venture group formerly known as Google and in-licensing a mid-stage drug that Novartis clearly thinks highly of for enhancing cord blood stem cells as a treatment.
Oh, and some of that venture cash is from crossover investors, spurring some added thinking in this fledgling biotech about the right timing on a potential IPO.
The drug is HSC835, which is now being rechristened as MGTA-456. And the therapy comes with data from some small trials, helping advance Magenta with a full-fledged clinical program which fits neatly into Magenta’s R&D strategy.
Novartis has spotlighted this drug for its ability to improve the therapeutic power of umbilical cord transplants, amping up the stem cells needed for the engraftment process to create infection-fighting cells. And that’s right in Magenta’s wheelhouse.
It’s a great fit for Magenta, CEO Jason Gardner tells me. The biotech hired in a pair of the early investigators on this program. And when they went to Novartis to sound out their interest managing its clinical future, declaring a commitment to hustling it through the clinic, the message resonated well at the pharma giant, which retains an unspecified interest in the drug.
Magenta is keeping those terms to itself — which is generally how Novartis likes to keep things.
The extra $50 million that just arrived in an accelerated Series B will also help the biotech expand its focus on cancer, genetic diseases and autoimmunity.
GV (formerly Google Ventures) led the round, with participation from all existing investors, including Atlas Venture, Third Rock Ventures, Partners Innovation Fund and Access Industries. The financing also included Casdin Capital and other crossover investors, as well as Be The Match BioTherapies, a subsidiary of National Marrow Donor Program. And Be The Match BioTherapies — with its 178 US transplant centers — is allying with the biotech as it pushes ahead with new clinical trials.
We’re a long way from the 2014 biotech IPO boom, which was the last time you could flip a startup into Nasdaq. But the CEO is happy to concede that the subject has come up inside the company.
“We have discussed that option,” says Gardner. “We like that option.” But there are lots of options to consider right now, he adds, including doing some non-dilutive deals.
Says Gardner: “We like to have all the options available to the company.”
Out-licensing is not a new strategy for Novartis. Just last March Novartis decided to spin out a pair of anti-aging therapeutics to a PureTech startup, the latest in a series of out-licensing deals for a company that has been careful to focus on the core strategy under Chairman Joerg Reinhardt, who’s keenly interested in maintaining a relatively conservative research focus at the pharma giant as revenue flattened and then declined.
For Gardner, a GSK vet who was sent to Cambridge to help scout new therapies for the pharma giant and wound up getting sucked into Atlas’ startup world, the acceleration at Magenta feels fine.
By the end of this year, says Gardner, he expects the 26-member team at Magenta to grow to about 40. And along the way will come more data and a clear outline of development timelines that will put this biotech way ahead of most any fledgling to pop up in the Boston hub.
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