Chris Garabedian. Perceptive

IBD start­up Lan­dos lands $60M Se­ries B in first test case of Chris Garabe­di­an's lean and mean mod­el at Xon­toge­ny

When Chris Garabe­di­an teamed up with Vir­ginia Tech pro­fes­sor Josep Bas­saganya-Ri­era to launch Lan­dos, their team of 13 was ready to test their lead drug for in­flam­ma­to­ry bow­el dis­ease in the clin­ic. But they al­so set out to prove an­oth­er, al­most ex­is­ten­tial, hy­poth­e­sis: If you find the right part­ners, you can build a prop­er ear­ly-stage biotech with just $10 mil­lion in­stead of fol­low­ing the more splashy mod­el that’s be­come stan­dard in the in­dus­try.

Josep Bas­saganya-Ri­era

So 18 months lat­er, as Lan­dos clos­es a $60 mil­lion Se­ries B and lines up two Phase II stud­ies, it’s al­so serv­ing as an in­ter­im read­out of sorts for the meta ex­per­i­ment at Garabe­di­an’s start­up ac­cel­er­a­tor, Xon­toge­ny. In the process, the ex-Sarep­ta CEO is al­so un­veil­ing a ven­ture fund that Xon­toge­ny has set up with Per­cep­tive Ad­vi­sors as he plots sev­er­al more sim­i­lar plays.

True to its lean and mean mot­to, Lan­dos has grown on­ly slight­ly to 15 staffers while hus­tling through large an­i­mal tox­i­c­i­ty stud­ies and a Phase I in Aus­tralia, which con­firmed both safe­ty and ac­tiv­i­ty in a key bio­mark­er.

“We’ve come a long way,” Bas­saganya-Ri­era told me.

In ad­di­tion to tar­get­ing a path­way he’s stud­ied for more than a decade known as Lan­thio­n­ine Syn­thetase C-Like 2 (LAN­CL2), Lan­dos has come up with a small mol­e­cule drug that over­comes sev­er­al draw­backs of cur­rent ther­a­pies for Crohn’s dis­ease and ul­cer­a­tive col­i­tis. It’s oral­ly avail­able and lim­it­ed to the gut with lit­tle sys­temic ex­po­sure.

In the up­com­ing Phase II stud­ies — first ul­cer­a­tive col­i­tis, then Crohn’s — Lan­dos plans to eval­u­ate two dos­es of BT-11 along­side place­bo, eye­ing clin­i­cal re­mis­sion as the main end­point.

They’ve set it up this way to present the strongest case pos­si­ble for the in­dus­try, Ga­rade­bian said. With crossover in­vestors like RTW, Os­age Uni­ver­si­ty Part­ners and PBM Cap­i­tal on board, he’s al­ready think­ing about an ex­it, whether in the form of an IPO or a buy­out.

“We looked at when Cel­gene ac­quired No­gra Phar­ma for $700 mil­lion, it was based on an open la­bel sin­gle arm study that had some in­ter­est­ing da­ta in Crohn’s that ul­ti­mate­ly failed,” he said. “We ac­tu­al­ly like the idea of fol­low­ing the Re­cep­tos mod­el, which did a well de­signed pow­ered Phase II stud­ies that ul­ti­mate­ly sold to Cel­gene for $7 bil­lion in­stead of $700 mil­lion.”

Bas­saganya-Ri­era, the CEO, added that in prepa­ra­tion for the ex­it he will like­ly beef up the med­ical team and hire a CFO in the man­age­ment of­fice at Ash­burn, Vir­ginia (his lab, as well as the cor­po­rate head­quar­ters, re­mains in Black­burg in the south­ern part of the state). But the hope is to stay ag­ile, con­tin­u­ing to re­ly on a close re­la­tion­ship with Garabe­di­an and his team at Xon­toge­ny, which has helped with every­thing from ad­vis­ing on how to deal with the FDA to re­view­ing term sheets that has saved the com­pa­ny many mis­takes along the way.

That kind of week-to-week in­ter­ac­tion and over­sight was ex­act­ly what Garabe­di­an was look­ing for in a Xon­toge­ny com­pa­ny. With a goal to and a goal to raise as much as $200 mil­lion for the Per­cep­tive Xon­toge­ny Ven­ture Fund, he’s eye­ing a num­ber of oth­er projects span­ning on­col­o­gy, hema­tol­ogy, CNS, car­dio­vas­cu­lar, and more, in which they can write the en­tire Se­ries A check and help bring a com­pa­ny to the clin­ic with­in two years of get­ting in­volved by out­sourc­ing much of the work.

Garabe­di­an calls it the old fash­ioned way of do­ing ven­ture cap­i­tal. And he be­lieves it still works.

“I would ar­gue that many ear­ly-stage biotechs are over-cap­i­tal­ized, they are over-re­sourced,” he said. “It’s not un­com­mon for a Se­ries A round to end up hir­ing a CEO and a chief sci­en­tif­ic of­fi­cer and a chief med­ical of­fi­cer and a head of reg­u­la­to­ry and a head of tech ops and a lot of these peo­ple are mak­ing half a mil­lion dol­lars a year, and I think that is more than what’s need­ed if you know what you’re do­ing. If you fo­cus on the de­sign of the ex­per­i­ments and you know how to iden­ti­fy the right sup­plies to help you do it.”

“Hon­est­ly, the mes­sage that we want to get out ul­ti­mate­ly is to prove that you can do good drug de­vel­op­ment, and you can do it ef­fi­cient­ly with a small, fo­cused team. and I hope that peo­ple will look back and say why are we spend­ing $50 mil­lion, $60 or $80 mil­lion in a Se­ries A,” he added.

At Lan­dos, the $10 mil­lion didn’t even just cov­er BT-11. While the lead as­set has tak­en up the ma­jor­i­ty of their ef­forts, Bas­saganya-Ri­era said they have an “ex­pan­si­ble pipeline” fea­tur­ing as­sets that tar­get LAN­CL2 in dif­fer­ent ways for oth­er au­toim­mune dis­eases like type 1 di­a­betes and rheuma­toid arthri­tis. As­sets tar­get­ing a nov­el path­way dubbed NL­RX1 are al­so in the works.

“We have the po­ten­tial to ad­vance oth­er as­sets over next few months,” he said. “We are not a one-trick pony.”

Brian Kaspar. AveXis via Twitter

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But in his first public response, the scientific founder at AveXis — acquired by Novartis for $8.7 billion — is firing back. And he says that not only was he not involved in any wrongdoing, he’s ready to defend his name as needed.

I reached out to Brian Kaspar after Novartis put out word that he and his brother Allen had been axed in mid-May, two months after the company became aware of the allegations related to manipulated data. His response came back through his attorneys.

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Novartis CEO Vas Narasimhan [via Bloomberg/Getty]

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But he couldn’t quite get there.

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In one of the least anticipated moves of the year, the FDA has rejected Sarepta’s application for an accelerated approval of its Duchenne MD drug golodirsen after fretting over safety issues.

In a statement that arrived after the bell on Monday, Sarepta explained the CRL, saying:

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Levi Garraway. Broad Institute via Youtube

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As Bloomberg notes, most of the Wall Street analysts that cover Sarepta $SRPT are an upbeat bunch, ready to cheer on the team when it comes to their Duchenne MD drugs, or offer explanations when an odd setback occurs — as happened recently with a safety signal that was ‘erroneously’ reported last week.

Ritu Baral Cowen
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The drug, lefamulin, has been developed as an intravenous and oral formulation and been tested in two late-stage clinical trials. The semi-synthetic compound, whose dosing can be switched between the two formulations, is engineered to inhibit the synthesis of bacterial protein by binding to a part of the bacterial ribosome.

Saqib Islam. CheckRare via YouTube

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Bain-backed SpringWorks is the better-known company of the two, and it’s gunning for a larger windfall of $115 million to add to $228 million from previous financings. In the process, the Stamford, CT-based team is also drawing the curtains on the partnerships it has in mind for the pair of assets it had initially licensed from Pfizer.

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Back in the spring of last year, Vanda Pharmaceuticals $VNDA served up a hot stew of mixed data for a slate of endpoints related to what they called clear evidence that their melatonin sleep drug Hetlioz (tasimelteon) could help millions of travelers suffering from jet lag.

Never mind that they couldn’t get a planned 90 people in the study, settling for 25 instead; Vanda CEO Mihael H. Polymeropoulos said they were building on a body of data to prove it would help jet-lagged patients looking for added sleep benefits. And that, they added, would be worth a major upgrade from the agency as they sought to tackle a big market.