Locus pulls in a modest Series B as it attempts to emulate oncology's precision medicine model in antibacterials
Despite a significant bear market affecting the public biotech sector, private companies are still managing to pull in VC-backed funding rounds. The latest such round comes out of North Carolina’s research triangle for a precision antibacterial drug maker.
Locus Biosciences closed a $35 million Series B round Wednesday morning, featuring some notable names including Artis Ventures, Tencent Holdings, Viking Global Investors, Discovery Innovations and Johnson and Johnson Innovation, the investment arm of J&J. CEO and co-founder Paul Garofolo told Endpoints News that the funds will be used to advance the company’s lead candidate, dubbed LBP-EC01.
The program is a crPhage precision medicine targeting E.coli bacteria causing urinary tract infections. The candidate, for which BARDA offered a $76.9 million funding award in 2020, is nearing a Phase II/III trial that the company hopes will start in the middle of 2022.
Garofolo says that while many early entrants in the microbiome space were mainly focused on donor-derived solutions, Locus’ philosophy has always been to attack specific targets with precision medicine. According to him, the biotech’s drugs are designed to limit off-site toxicity: an approach similar to the vast array of oncology biotechs out there, though for Locus that means not affecting “good” bacteria.
The CEO is also looking toward acquisitions, a move they’re familiar with as, after its Series A in 2017, the company acquired Epibiome’s platform. The deal managed to put Locus on J&J’s radar, Garofolo said, and it is a move they are considering again, especially as the market going through a turbulent period.
“We think there (are) great precision addition technologies that are out there that are really struggling, the microbiome space is not in great shape. I don’t necessarily think that’s because the companies are not great companies,” he said. “I think there are some great companies out there that are really in basically troubled waters.”
The company’s previous Series A round in 2017, of which Artis and Tencent were a part, netted the company $17 million. But since then, the company has been landing several non-dilutive deals to keep the company’s engine running. This includes a deal in 2019 with J&J to develop CRISPR-engineered bacteriophage therapeutics targeting two key pathogens for the potential treatment of respiratory tract infections, among others.
Through that deal, Locus earned a cool $20 million in initial payments, and the biotech is eligible to receive a total of $798 million in potential milestone payments and royalties.
Overall, Garofolo is tightening up Locus’s war chest for the months ahead. He said he feels prepared for what the trials and the market might have up their sleeves.