Microbiome, New Capital, Venture Capital

French VC Seventure focuses second fund on fertile microbiome field — targets €200M-plus

A few years ago, the spectacular failure of Seres Therapeutics’ seminal effort into developing a “crapsule” — a synthetic, fermented microbiome therapeutic derived by a manufacturing process that does not require human donor material — derailed an emerging field working to harness the insights gained from gut microbiota to develop drugs. But since then, the success of fecal transplant therapies to treat stubbornly recurrent C. diff infections has entered the biopharma zeitgeist, attracted a bucket of biobucks and even inspired the takeover of a key player, Rebiotix. The therapeutic effort has resurged alongside a burgeoning interest in nutrition — think probiotics. French VC Seventure Partners has fingers in every microbiome pie — drugs, diagnostics, digital offerings and nutrition — and it has launched its second dedicated microbiome fund with a target of more than €200 million.

Isabelle de Cremoux

Unsurprisingly, the biggest capital injection is reserved for therapeutics compared to the remaining three categories, Isabelle de Cremoux, managing partner of Seventure Partners, who led the fund raising, told Endpoints News. The first two investments from the fund, dubbed Health for Life Capital (HFL) II, have already been made in US-based Axial Biotherapeutics ($25 million round) and Denmark-based Galecto Biotech (€79 million round), she said, declining to provide details on the value of each investment.

“When I raised HFL I more than four years ago, my client list was not very long, we would have to explain what it (the microbiome field) was in the first parts of meetings — for HFL II it has completely changed, most are aware of what it is,” she said.

HFL II was launched this January, while the original fund was launched in 2014. Both funds have enticed investments from global players such as Danone and Novartis, as well as entrepreneurs and financial institutions.

“There were investors in the first fund that are re-upping their investment in the second fund — approximately 90% are coming back from the first fund,” de Cremoux said.

The concept of fecal microbiota transplantation (FMT) — replenishing a patient’s gut with bacteria from a healthy feces — was originally documented in China, and has been used in the United States since the 1950s with little regulatory scrutiny. About six years ago, the FDA sanctioned the use of FMT as a last resort measure for recurrent C. diff, but the agency continues to consider it an investigational treatment. Globally, hundreds of trials are now underway testing the potential of FMT for patients suffering from various illnesses, from autism to obesity.

Microbiome-based therapeutics today is a fertile field for drug developers targeting a wide variety of indications using different therapeutic modalities, some of which are designed to sidestep the “ick” factor associated with traditional stool transfer.

Chronologically many of the companies are targeting C. diff as a first indication to show proof of efficacy before expanding to other bigger indications. After C. diff, we’ve seen a wave of compounds targeting IBD and Crohn’s diseases, metabolic diseases (such as obesity and diabetes),  autoimmune diseases and finally cancer, de Cremoux noted: “Cancer is certainly bigger in size in terms of market potential for microbiome compounds. More recently it’s been about gut-brain access: not only Parkinson’s like Axial is targeting, but also severe depression and eating disorders.”

She added:

The field all started with FMTs, then it moved out of FMT to focus on living bioproducts, phage-derived compounds and small molecules etc. Surprisingly the field is moving back again on FMT because even if it’s very complex from a regulatory perspective…the current clinical trials testing FMT really show spectacular results, and from a timeframe perspective it will probably be the earlier product to be approved in the microbiome sector, although some of the other compounds mentioned will have a higher market potential.

In HFL I, Seventure invested a total €160 million in 20 companies including Enterome, Vedanta Biosciences, MaaT Pharma, and BiomX. HLF II is expected to hit its goal (of €200 million) with 20 investments — by this summer.


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