Go­ing big: Biotech vets blast off with Ar­rakis on a new jour­ney of RNA ex­plo­ration


Michael Gilman and an ex­pe­ri­enced band of biotech vets are bust­ing out of stealth mode to­day with a start­up that marks the se­r­i­al en­tre­pre­neur’s third launch in 10 years. And he’s com­ing out in style, with a $38 mil­lion A round led by Canaan Part­ners.

Af­ter lit­er­al­ly stum­bling across the com­pa­ny while it was still in the white-board phase of de­vel­op­ment in 2015, Gilman says he was ripe for the chal­lenge and ad­ven­ture. And it’s a big one.

CSO and founder Russ Pet­ter has been hon­ing the bioin­for­mat­ics tools, as­says and chem­i­cal li­braries Ar­rakis Ther­a­peu­tics will need to cre­ate a plat­form tech­nol­o­gy that can be used to de­vel­op small mol­e­cules to in­hib­it dis­ease-caus­ing RNA.

This biotech has a long jour­ney ahead in pre­clin­i­cal work be­fore it can start try­ing this out in hu­mans. But if they’re right, the com­pa­ny will be on their way to work­ing on oral ther­a­pies that would be able to hunt down a host of what had been con­sid­ered un­drug­gable tar­gets — start­ing with an ini­tial aim at neu­rol­o­gy and can­cer.

Most pre­clin­i­cal star­tups like this come out of acad­e­mia. But this is a unique­ly Cam­bridge-based out­fit, bring­ing to­geth­er peo­ple with decades of ex­pe­ri­ence right in the heart of one of the world’s biggest biotech hubs.

“I’ve known Russ for a long time,” says Gilman, whose CV in­ter­sects with the founder’s stint at Bio­gen. “He ran chem­istry when I ran re­search there. He’s been work­ing on this for awhile.”

And Pet­ters isn’t the on­ly oth­er Bio­gen vet on board. Chief Busi­ness Of­fi­cer Daniel Ko­er­w­er and James Bar­soum, SVP of bi­ol­o­gy, al­so trace their ca­reers back to the Cam­bridge, MA gi­ant. Col­lec­tive­ly, they list stints at more than a dozen dif­fer­ent biotech com­pa­nies on their re­sumes.

Gilman crossed paths with Pet­ter in 2015, when the fel­low sci­en­tist was hatch­ing his plans for Ar­rakis — a com­pa­ny named af­ter the plan­et in Frank Her­bert’s Dune — in some shared of­fice space where Gilman had one of his board meet­ings. Pet­ter had had his in­ter­est whet­ted at a con­fer­ence pre­sen­ta­tion on small mol­e­cules and RNA in­ter­ac­tions.

They talked, Bris­tol-My­ers Squibb de­cid­ed it would pay a hand­some price for Gilman’s last com­pa­ny, Pad­lock, and af­ter tak­ing last sum­mer off, they got down to se­ri­ous­ly ex­plor­ing the idea to­geth­er.

The mon­ey fol­lowed the ideas.

Along with Canaan Part­ners, Ad­vent Life Sci­ences, Pfiz­er, Cel­gene, Os­age Uni­ver­si­ty Part­ners, and biotech in­dus­try leader Hen­ri Ter­meer chipped in to the A round. The UK’s Ad­vent and Ter­meer helped seed the ini­tial work. And if Ar­rakis’ team is right, there will be plen­ty of op­por­tu­ni­ties along the way to set up plat­form col­lab­o­ra­tions and part­ner­ships.

Colleen Cuf­faro

“I was very in­trigued from the minute I heard the con­cept,” says Colleen Cuf­faro, a prin­ci­pal at Canaan who’s tak­ing a board spot at Ar­rakis.  “It has enor­mous po­ten­tial, how it opens up a whole new space for un­drug­gable tar­gets on our radar for a long time. I re­al­ly like the ap­proach of us­ing small mol­e­cules that are fun­da­men­tal­ly dif­fer­ent than any oth­er RNA-tar­get­ing ap­proach I’ve seen. The oth­er piece was the team, a re­al­ly proven team, with a track record that is out­stand­ing.”

Gilman isn’t con­cen­trat­ing sole­ly on Ar­rakis. He’s been deeply in­volved with At­las Ven­ture, and they’re plan­ning an­oth­er com­pa­ny launch lat­er in the year. But Gilman isn’t stressed by the idea of helm­ing two ven­tures at once.

At Pad­lock, says Gilman, “I felt like I had ex­tra time on my hands.” Af­ter all, CEOs of star­tups of­ten “spend a lot of time wait­ing around for stuff to hap­pen.” And if you have the kind of team he’s work­ing with at Ar­rakis, it’s not a full-time job.

This is not Gilman’s first biotech rodeo. He knows first hand that a ven­ture-backed start­up of­ten lands in oth­er hands, as hap­pened with Stromedix and Pad­lock. This time around though, he would like to take it all out much fur­ther.

“You can nev­er rule it out,” he says, “but this is a com­pa­ny I would like to see built for the long haul. I tru­ly be­lieve we’ll have the ca­pa­bil­i­ty to crank out new drugs oth­er peo­ple haven’t been able to make.”

Gilman’s a long­time be­liev­er in the adage that in biotech, you should go big or go home.

Once again, he’s go­ing big.

A New Fron­tier: The In­ner Ear

What happens when a successful biotech venture capitalist is unexpectedly diagnosed with a chronic, life-disrupting vertigo disorder? Innovation in neurotology.

That venture capitalist was Jay Lichter, Ph.D., and after learning there was no FDA-approved drug treatment for his condition, Ménière’s disease, he decided to create a company to bring drug development to neurotology. Otonomy was founded in 2008 and is dedicated to finding new drug treatments for the hugely underserved community living with balance and hearing disorders. Helping patients like Jay has been the driving force behind Otonomy, a company heading into a transformative 2020 with three clinical trial readouts: Phase 3 in Ménière’s disease, Phase 2 in tinnitus, and Phase 1/2 in hearing loss. These catalysts, together with others in the field, highlight the emerging opportunity in neurotology.
Otonomy is leading the way in neurotology
Neurotology, or the treatment of inner ear neurological disorders, is a large and untapped market for drug developers: one in eight individuals in the U.S. have moderate-to-severe hearing loss, tinnitus or vertigo disorders such as Ménière’s disease.1 With no FDA-approved drug treatments available for these conditions, the burden on patients—including social anxiety, lower quality of life, reduced work productivity, and higher rates of depression—can be significant.2, 3, 4

Af­ter 4 years of furor, the FTC and New York state ac­cuse Mar­tin Shkre­li of run­ning a drug mo­nop­oly. And this time they plan to squash it

Pharma bro Martin Shkreli was jailed, publicly pilloried and forced to confront some lawmakers in Washington riled by his move to take an old generic and move the price from $17.50 per pill to $750. But through 4 years of controversy and public revulsion, his company never backed away from the price — left uncontrolled by a laissez faire federal policy on a drug’s cost.

Now the FTC and the state of New York plan to pry his fingers off the drug once and for all and open it up to some cheap competition.

Patrik Jonsson, the president of Lilly Bio-Medicines

Who knew? Der­mi­ra’s board kept watch as its stock price tracked Eli Lil­ly’s se­cret bid­ding on a $1.1B buy­out

In just 8 days, from December 6 to December 14, the stock jumped from $7.88 to $12.70 — just under the initial $13 bid. There was no hard news about the company that would explain a rise like that tracking closely to the bid offer, raising the obvious question of whether insider info has leaked out to traders.

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Short at­tack­er Sahm Ad­ran­gi draws crosshairs over a fa­vorite of Sanofi’s new CEO — with PhII da­ta loom­ing

Sahm Adrang Kerrisdale

Kerrisdale chief Sahm Adrangi took a lengthy break from his series of biotech short attacks after his chief analyst in the field pulled up stakes and went solo. But he’s making a return to drug development this morning, drawing crosshairs over a company that’s one of new Sanofi CEO Paul Hudson’s favorite collaborators.

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UP­DAT­ED: Ac­celeron of­fers thumbs up on a PhII suc­cess for would-be block­buster drug — and shares rock­et up

There’s no public data yet, but Acceleron $XLRN says that its first major trial readout of 2020 is a success.

In a Phase II study of 106 patients with pulmonary arterial hypertension (PAH), Acceleron’s experimental drug sotatercept hit its primary endpoint: a significant reduction in pulmonary vascular resistance. The drug also met three different secondary endpoints, including the 6-minute walking test.

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Civi­ca and Blue Cross Blue Shield launch new ven­ture to low­er gener­ic prices

Five years after Martin Shkreli put a smug face to the volatile prices companies can charge even for generic drugs, payers and governments are coming up with outside-the-box solutions.

The latest fix is a new venture from the Blue Cross Blue Shield Association, 18 of its members and Civica, the generics company founded in 2018 by hospitals fed up with high prices for drugs that had long-since lost patent protection. While Civica focused on drugs that hospitals purchased, the new company will aim to lower prices on drugs that, like Shkreli’s Daraprim, are purchased by individuals.

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Merck Invests in State-Of-The-Art Biotech Development Facility in Switzerland

Mer­ck KGaA match­es lofty R&D goals with €250M in­vest­ment in­to a new clin­i­cal man­u­fac­tur­ing site in Switzer­land

As Merck KGaA strives to prove itself as a capable biopharma R&D player, it has begun construction on a €250 million facility dedicated to developing and manufacturing drugs for use in clinical trials.

The German drugmaker chose a location at Corsier-sur-Vevey, Switzerland, where it already has a commercial manufacturing site, in order to “bridge together research and manufacturing.”

“This investment in the Merck Biotech Development Center reflects our commitment to speed up the availability of new medicines for patients in need, and confirms the importance of Switzerland as our prime hub for the manufacturing of biotech medicines,” CEO Stefan Oschmann said at the groundbreaking ceremony, according to a statement.

Breast can­cer ap­proval in tow, As­traZeneca, Dai­ichi armed an­ti­body scores in key gas­tric can­cer study

AstraZeneca kicked off Monday with a flurry of good news. Apart from unveiling positive results on its stroke trial testing its clot-fighter Brilinta, and welcoming its experimental IL-23 inhibitor brazikumab back from Allergan — the British drugmaker also disclosed some upbeat gastric cancer data on its HER2-positive oncology therapy it is collaborating on with Daiichi Sankyo.

Buoyed by the performance of its oncology drugs, last March AstraZeneca chief Pascal Soriot bet big to partner with Daiichi on the cancer drug, with $1.35 billion upfront in a deal worth up to roughly $7 billion. Roughly 8 months later, as 2019 drew to a close, the FDA swiftly approved the drug — trastuzumab deruxtecan — for use in breast cancer, months ahead of the expected decision date.

Sor­ren­to shrugs off an anony­mous pri­vate eq­ui­ty group’s $1B of­fer to buy the com­pa­ny

San Diego-based Sorrento Therapeutics isn’t going the M&A route — at least not today.

The biotech caused quite a stir when it put out word a few weeks ago that an unidentified private equity group was bidding a billion dollars-plus for the company. The news drove a quick spike in the company’s share price as investors hooked up for the ride — that didn’t happen.

The update sparked a 5% drop in the share price $SRNE ahead of the bell. It’s now trading just above $4, without any evidence that the $7 price looked like it was firm.