Jonathan Montagu (L) and Gerry Harriman, HotSpot co-founders

HotSpot gets hot­ter with $100M raise to push to­ward clin­ic

HotSpot Ther­a­peu­tics, the al­lostery-fo­cused biotech that works on what it calls “nat­ur­al hotspots” — hence the name — is get­ting a bit hot­ter in its val­u­a­tion from in­vestors. And to that end they’ve raised $100 mil­lion.

The four-year-old AI com­pu­ta­tion­al biotech start­ed by two for­mer Nim­bus ex­ecs an­nounced this morn­ing that it closed its Se­ries C round right at the line of a 9-fig­ure in­vest­ment, cour­tesy of some big in­vestors.

Piv­otal bioVen­ture Part­ners took the lead on the round — with “sig­nif­i­cant par­tic­i­pa­tion” by LSP and B Cap­i­tal Group. A slew of new in­vestors hopped on the band­wag­on, such as Monashee In­vest­ment Man­age­ment and Rev­e­la­tion Part­ners, along with some old in­vestors like At­las Ven­ture, SR One Cap­i­tal Man­age­ment and Sofinno­va Part­ners.

This new round more than dou­bles what HotSpot has pre­vi­ous­ly raised, bring­ing it to a to­tal of $190 mil­lion. The last time HotSpot raised funds was in May 2020, when the biotech an­nounced a $65 mil­lion Se­ries B.

The biotech fol­lows in Nim­bus’ foot­steps of de­vel­op­ing ther­a­pies for so-called al­losteric tar­gets us­ing a com­pu­ta­tion­al plat­form — look­ing at pro­tein pock­ets be­yond ac­tive sites to find ways to drug pro­teins that were pre­vi­ous­ly deemed un­drug­gable or hard to drug.

And as with many rounds, there’s al­so board ap­point­ments. Ash Khan­na, a ven­ture part­ner with Piv­otal bioVen­ture Part­ners, and Fouad Az­zam of LSP will join HotSpot’s board of di­rec­tors.

For HotSpot’s co-founders, CEO Jonathan Mon­tagu and CSO Ger­ry Har­ri­man, this al­lows HotSpot to piv­ot more in­to clin­i­cal de­vel­op­ment.

And with the Se­ries C, an IPO is usu­al­ly not far be­hind. As Mon­tagu put it, this raise puts HotSpot “in the dri­ver’s seat,” he told End­points News — and while it’s too ear­ly to con­sid­er a move in­to the pub­lic eq­ui­ty mar­ket, he says it al­lows HotSpot the flex­i­bil­i­ty as to when it goes pub­lic.

With the cash run­way un­til 2024, the new round al­lows the biotech to move pro­grams in­to the IND-en­abling phase, Mon­tagu said. Their plan is to file an IND on their lead pro­gram some­time next year — a CBL-B tar­get fo­cus­ing on the E3 lig­ase — af­ter HotSpot nom­i­nates a de­vel­op­ment can­di­date for that tar­get. Even­tu­al­ly, HotSpot’s goal is to start dos­ing pa­tients in a clin­i­cal set­ting by the end of 2022.

The com­pa­ny hopes the IND will be the first of many. Out­side of the com­pa­ny’s 3 pub­licly-known tar­gets, there’s a few more that re­main undis­closed that, in Mon­tagu’s mind, gives HotSpot lever­age in ef­fi­cient R&D.

“We’re go­ing to scale the com­pa­ny so that we can have a steady state of 2-3 lead op­ti­miza­tion pro­grams at any one time, which will trans­late in­to a steady ca­dence of mol­e­cules en­ter­ing the clin­ic,” Mon­tagu said in an in­ter­view.

Out­side of the pipeline, the com­pa­ny is al­so look­ing to in­crease the num­ber of em­ploy­ees — which is cur­rent­ly split be­tween Boston and New Jer­sey. HotSpot is cur­rent­ly ex­pand­ing its team over­seas in Berlin, Ger­many, Mon­tagu con­firmed.

“What we would like to do is to re­al­ly build out a num­ber of ar­eas in our re­search or­ga­ni­za­tion that can not on­ly sup­port a grow­ing pipeline, but al­so make deep in­vest­ments in­to our plat­form. So we will see growth in ar­eas such as bi­ol­o­gy, chem­istry, and then our AI ef­forts in our plat­form,” Har­ri­man told End­points in an in­ter­view.

Har­ri­man al­so said they would hire out­side com­pa­nies for man­u­fac­tur­ing when it reach­es that point.

Has the mo­ment fi­nal­ly ar­rived for val­ue-based health­care?

RBC Capital Markets’ Healthcare Technology Analyst, Sean Dodge, spotlights a new breed of tech-enabled providers who are rapidly transforming the way clinicians deliver healthcare, and explores the key question: can this accelerating revolution overturn the US healthcare system?

Key points

Tech-enabled healthcare providers are poised to help the US transition to value, not volume, as the basis for reward.
The move to value-based care has policy momentum, but is risky and complex for clinicians.
Outsourced tech specialists are emerging to provide the required expertise, while healthcare and tech are also converging through M&A.
Value-based care remains in its early stages, but the transition is accelerating and represents a huge addressable market.

FDA ad­vi­sors unan­i­mous­ly rec­om­mend ac­cel­er­at­ed ap­proval for Bio­gen's ALS drug

A panel of outside advisors to the FDA unanimously recommended that the agency grant accelerated approval to Biogen’s ALS drug tofersen despite the drug failing the primary goal of its Phase III study, an endorsement that could pave a path forward for the treatment.

By a 9-0 vote, members of the Peripheral and Central Nervous System Drugs Advisory Committee said there was sufficient evidence that tofersen’s effect on a certain protein associated with ALS is reasonably likely to predict a benefit for patients. But panelists stopped short of advocating for a full approval, voting 3-5 against (with one abstention) and largely citing the failed pivotal study.

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Alaa Halawa, executive director at Mubadala’s US venture group

The ven­ture crew at Mubadala are up­ping their biotech cre­ation game, tak­ing care­ful aim at a new fron­tier in drug de­vel­op­ment

It started with a cup of coffee and a slow burning desire to go early and long in the biotech creation business.

Wrapping up a 15-year discovery stint at Genentech back in the summer of 2021, Rami Hannoush was treated to a caffeine-fueled review of the latest work UCSF’s Jim Wells had been doing on protein degradation — one of the hottest fields in drug development.

“Jim and I have known each other for the past 15 years through Genentech collaborations. We met over coffee, and he was telling me about this concept of the company that he was thinking of,” says Hannoush. “And I got immediately intrigued by it because I knew that this could open up a big space in terms of adding a new modality in drug discovery that is desperately needed in pharma.”

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Sanofi, Re­gen­eron boast PhI­II win with Dupix­ent in COPD, clear­ing first bar for ex­pan­sion

Dupixent, the blockbuster anti-inflammatory drug from Sanofi and Regeneron, has cleared a high-stakes Phase III study in chronic obstructive pulmonary disease, the companies announced Thursday morning.

If they hold up in a second, identical trial, the data pave the way for Dupixent to become the first biologic to treat patients whose COPD remains uncontrolled despite being on maximal standard-of-care inhaled therapy — the patient population studied in the pivotal program. The companies had spotlighted this as a key readout as they look to expand the Dupixent franchise and explore its full potential.

Genen­tech to stop com­mer­cial man­u­fac­tur­ing at Cal­i­for­nia head­quar­ters

Genentech is halting commercial manufacturing at its California headquarters — and laying off several hundred employees.

The move is the result of a decision Genentech made in 2007 to relocate manufacturing operations from its South San Francisco headquarters location to other facilities or move the work to CDMOs, said Andi Goddard, Genentech’s SVP of quality and compliance for pharmaceutical technical operations, in an interview with Endpoints News. Genentech has made changes in capabilities and invested more in technology, so it doesn’t need as many large-scale manufacturing facilities as it did in the past, she said.

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Chat­G­PT with phar­ma da­ta de­buts for med­ical meet­ings, be­gin­ning with AACR

What do you get when you combine ChatGPT generative AI technology with specific pharma and clinical datasets? A time-saving tool that can answer questions about medical conference abstracts and clinical findings in seconds in one new application from ZoomRx called FermaGPT.

ZoomRx is debuting a public version of its generative AI product specifically for medical conferences beginning this week for the upcoming American Association for Cancer Research (AACR) annual meeting that runs April 14-19.

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Quince Ther­a­peu­tics faces takeover bid from share­hold­er Echo Lake Cap­i­tal

A bid to take over the biotech Quince Therapeutics has been put forward by one of its shareholders.

On Tuesday, Echo Lake Capital sent a letter to Quince’s board of directors putting forth a proposal to acquire all the biotech’s stock for $1.60 per share, which would value a takeover at around $58 million.

In the letter, Echo Lake said that it believes Quince’s stock is severely undervalued and that no drugs are being actively marketed or developed that require cash expenditures. It’s trading below the value of its assets, Echo Lake said.

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Flare Therapeutics biochemists Yong Li (L) and Valerie Vivat

A $123M Flare will get Third Rock on­col­o­gy biotech in­to the clin­ic this year

Flare Therapeutics will start its first human trial this year with an investigational urothelial cancer drug after pulling together a $123 million Series B from Big Pharmas, VCs and its incubator, Third Rock Ventures.

Launched in 2021 on the idea that a biotech could finally succeed at drugging the much-sought-after but stubborn transcription factor, Flare Therapeutics said Wednesday it is now primed for the clinic after closing its large financing haul earlier this year. The raise is a relatively stark figure in a tough startup financing environment but further buoys the upbeat signals coming out of other Third Rock biotechs in recent weeks, including the $200 million CARGO Therapeutics and $100 million Rapport Therapeutics rounds.

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In­cyte wins ac­cel­er­at­ed ap­proval for PD-1 in rare skin can­cer

Incyte touted an accelerated approval for its PD-1 retifanlimab in a rare skin cancer on Wednesday, roughly a year and a half after the drug suffered a rejection in squamous cell carcinoma of the anal canal (SCAC).

Retifanlimab, marketed as Zynyz, was approved for metastatic or recurrent locally advanced Merkel cell carcinoma (MCC), a fast-growing skin cancer typically characterized by a single, painless nodule. It’s roughly 40 times rarer than melanoma, according to the nonprofit Skin Cancer Foundation — but incidence is growing, particularly among older adults, Incyte said in its announcement.