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.