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.

Paul Stoffels, incoming Galapagos CEO (Michael Kovac/Getty Images)

UP­DAT­ED: Big Phar­ma R&D leg­end Paul Stof­fels is trad­ing his J&J ti­tle for the CEO role at one of the most deeply trou­bled biotechs in the in­dus­try

After 20 years working at the pinnacle of Big Pharma R&D, taking lead roles in J&J’s pipeline revamp and a quickly developed, one-shot Covid vaccine that is being sold around the world, it turns out the legendary Paul Stoffels has at least one more chapter ahead in his career.

And this one will be the biggest challenge the 59-year-old has faced yet.

After the market closed Wednesday, the longtime scientist was officially named as the new CEO of Galapagos, a troubled biotech trying to undergo a facelift in the wake of a disastrous alliance with Gilead that ended with the implosion of a drug program billed as one of the industry’s next big blockbuster stories.

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Pfiz­er wants to help the FDA with its new, court-man­dat­ed $4-5M FOIA re­lease on the com­pa­ny's Covid-19 vac­cine da­ta

An FDA court loss earlier this month has put the agency’s Freedom of Information Act office on its heels, as it now has to dump $4 million to $5 million into hiring 15 contractors to complete a historically swift anti-vaccine FOIA request that won a court-mandated release of 55,000 pages of data per month on Pfizer’s Covid-19 vaccine.

What’s more, Pfizer told the court this week that it’s ready to intervene to help the agency redact those pages.

Graphic: Shutterstock

Biotech bears are maul­ing stocks as 2022 opens on a bleak note for in­vestors

As the first month of 2022 draws to a close, one thing seems to be on everyone’s mind in the biopharma world: a burgeoning bear market.

While inflation and supply chain issues have sent the Dow Jones and S&P 500 tumbling — and the Nasdaq entering correction territory — in recent weeks, few sectors have been hit as hard as biotech. The Nasdaq biotechnology index and the XBI, two prominent barometers of public biotech performances, are down 15% and 20% since the start of the year, respectively, outpacing each of the three major US indices’ downswings as of Tuesday.

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Mas­sive $1.5B in­vest­ment in man­u­fac­tur­ing widens Eli Lil­ly's foot­print in Ire­land and North Car­oli­na

What do North Carolina and Ireland have in common? A tradition of friendly people, a deep appreciation of breweries, and now, new Eli Lilly manufacturing sites, set to hire 900 people.

Indianapolis-based Eli Lilly will pump almost $1.5 billion into the two new manufacturing facilities, the company announced on Friday. The short-term focus of these plants will be to bolster diabetes and cancer products, while the sites will take on Alzheimer’s and obesity medications in the long run.

Kaleido CEO Dan Menichella (AP Photo/Andrew Harnik)

Up­dat­ed: Flag­ship start­up brings out the bud­get ax, chops staff and clin­i­cal plans as share price floun­ders

One of Flagship’s startups appears to be buckling under the pressure of a steadily falling stock price.

The microbiome company Kaleido Biosciences confirmed a new report that it’s laying off staff, but is holding back on details, with CEO Dan Menichella telling Endpoints News in a statement:

We have taken steps to right-size the company and re-align resources to optimize our future success. We are on track to file an IND and initiate our Phase 2 trial in ulcerative colitis in the first half of this year.

Carl Hull, Maravai LifeSciences CEO

As pock­ets fill with cash, Mar­a­vai spends $240M to en­sure pure mR­NA pro­duc­tion

A San Diego-based life sciences company is taking over a longtime supplier and California neighbor to boost the purity of its nucleotides and improve the manufacturing process of mRNA, as the boom calls for more demand.

Maravai LifeSciences acquired MyChem for $240 million cash in a move that CEO Carl Hull says will help expand the company’s offering of therapeutics and vaccines.

“The great thing for us is that it allows us to have better control over our supply chain, so that’s a benefit for us and for our customers, but it also allows us to offer more components, more differentiated products to our customers,” he said.

Robert Califf (Graeme Sloan/Sipa via AP Images)

Rob Calif­f's nom­i­na­tion to be the next FDA com­mis­sion­er is now in se­ri­ous lim­bo

Historically, FDA nominees have breezed through their Senate confirmation votes.

In fact, the closest Senate vote for an FDA nominee in recent memory was Scott Gottlieb’s confirmation, which came with a 15-vote margin in his favor. Even former President Trump’s FDA nominee Stephen Hahn won more than 70 senators’ votes from both sides of the aisle.

But Rob Califf’s second attempt to be FDA commissioner (his first confirmation in 2016 was another 89-4 breeze) is proving to be the most difficult ever. And it’s coming at a critical moment for the country as Omicron has taken hold, and as the FDA has come under fire for some of its decision making and clarity around its plans for Covid-19 boosters.

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Up­dat­ed: JAK woes con­tin­ue as Eli Lil­ly warns of pos­si­ble Olu­mi­ant CRL for atopic der­mati­tis and re­ports PhI­II fail in lu­pus

Eli Lilly and Incyte have plans to turn their blockbuster Olumiant drug into a megablockbuster. But those plans ran into a major roadblock Friday morning.

The FDA does not agree with the companies on which atopic dermatitis patients should receive the drug, possibly leading to a CRL in the indication, the pair announced. Lilly and Incyte had submitted an sNDA in atopic dermatitis back in 2020, and it has been delayed multiple times as regulators continue to express safety concerns in the entire JAK inhibitor class.

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From left: Nobel laureate Robert Lefkowitz and Septerna CEO Jeff Finer

A new Third Rock start­up seeks a 'sec­ond gold­en age' of GPCR drug dis­cov­ery based on No­bel lau­re­ate's work

Among the most prolific target classes in all of drug discovery, a group of membrane proteins known as G protein-coupled receptors (GPCR) have been the focus of hundreds of approved medicines over several decades. But a team out of Third Rock Ventures thinks there’s a lot more to learn about GPCRs, and it’s working with the godfather of the field to find a breakthrough.

With backing from Third Rock and a clutch of A-list biotech VCs on board, Septerna Therapeutics launched Thursday with $100 million in funding and an already bustling pipeline and new technology offering researchers their best-ever look at the function and shape of GPCRs.

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