Look­ing to cure Type 1 di­a­betes, in­vestors front $114M to launch a pi­o­neer­ing hu­man study at Sem­ma

Three years ago, Har­vard’s Doug Melton pub­lished a land­mark study out­lin­ing how he had suc­cess­ful­ly used stem cells to cre­ate in­sulin-pro­duc­ing pan­cre­at­ic be­ta cells that were in­sert­ed in bulk in­to mice and suc­cess­ful­ly pro­tect­ed from an im­mune re­sponse — a break­through in re­gen­er­a­tive med­i­cine that bore re­al promise to pro­vide a cu­ra­tive ap­proach for Type 1 di­a­betes that could con­ceiv­ably end a life­time of in­sulin shots.

It was the cul­mi­na­tion of 23 years of lab work, launched when his son was di­ag­nosed with Type 1 di­a­betes. And that achieve­ment marked the be­gin­ning of some­thing new in biotech.

That same year Sem­ma Ther­a­peu­tics would be launched — with a $44 mil­lion A round land­ing in 2015 — in pur­suit of a mis­sion to com­plete one of the most am­bi­tious pre­clin­i­cal pro­grams in the re­gen­er­a­tive med field. And af­ter work­ing on all the nit­ty grit­ty re­search need­ed to see if this tech could be scaled up to hu­man size, an ex­pand­ed syn­di­cate of ven­ture in­vestors have put to­geth­er a whop­ping $114 mil­lion round with plans to take this in­to hu­mans for a first-of-its-kind proof-of-con­cept study.

One of the big chal­lenges Sem­ma faced in scal­ing up, Melton tells me, was to cre­ate a mem­brane specif­i­cal­ly de­signed with pores that were large enough for mol­e­cules to pass through but too small for im­mune cells to pen­e­trate. Us­ing some cal­cu­la­tions from the lab, Melton and his col­leagues es­ti­mat­ed that they would need some 150 mil­lion cells — pos­si­bly rang­ing up to three times that amount — in or­der to pro­vide the nat­ur­al in­sulin need­ed to elim­i­nate the shots.

Melton com­pares the mem­brane to a tea bag, but one that couldn’t be over­loaded. The re­place­ment cells, he said, “will on­ly se­crete the right amount de­pend­ing on the lev­el of sug­ar in the blood.”

Mark Fish­man

The big round marks an in­flec­tion point for the 35 staffers at Sem­ma, says chair­man Mark Fish­man, who joined Har­vard af­ter a 13-year stint run­ning the No­var­tis In­sti­tutes for Bio­Med­ical Re­search.

“Un­til you get this kind of fund­ing,” says Fish­man, “you don’t know how broad your strat­e­gy can be. With this fund­ing, we can get through a proof-of-con­cept tri­al, with enough in­for­ma­tion to know whether this works.” They can fol­low par­al­lel tracks and al­so start think­ing through some new di­rec­tions to pur­sue as their di­a­betes treat­ment pro­ceeds.

Typ­i­cal­ly, you nev­er see VCs back­ing a di­a­betes play. A few ma­jor multi­na­tion­als con­trol the bulk of the de­vel­op­ment work be­cause the reg­u­la­to­ry re­quire­ments for ap­proval are daunt­ing. But that’s in Type 2, which is spread­ing at epi­dem­ic pro­por­tions. In­her­it­ed Type 1 di­a­betes has a much small­er pop­u­la­tion, adds Fish­man, which makes it pos­si­ble to con­sid­er push­ing ahead in­to late-stage de­vel­op­ment alone.

As for time­lines, Fish­man is play­ing his cards close to the vest. Ear­ly-stage re­search, as he knows all too well, has a lot of vari­ables that can af­fect time­lines. An IND is com­ing, he says, and the com­pa­ny will see how it plays out, with a spe­cial fo­cus in start­ing to look at how durable a sin­gle treat­ment can be — one of the the big is­sues that Melton is most in­trigued by.

The mega-round in play al­so un­der­scores the will­ing­ness of ven­ture back­ers to go big these days when they’re fo­cused on mak­ing a pi­o­neer­ing ad­vance.

Eight Roads Ven­tures and Cowen Health­care In­vest­ments co-led the fi­nanc­ing with help from MPM Cap­i­tal, F-Prime Cap­i­tal Part­ners and Arch Ven­ture Part­ners. Ex­ist­ing strate­gic part­ners in­clude No­var­tis, Medtron­ic and the JDRF T1D Fund, and new in­vestors jump­ing in in­clude ORI Health­care Fund, Wu Cap­i­tal, 6 Di­men­sions Cap­i­tal and SinoPharm Cap­i­tal. Sem­ma named Daniel Auer­bach from Eight Roads and Kevin Raidy from Cowen to its board of di­rec­tors.

Biogen CEO Michel Vounatsos (via Getty Images)

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The big biotech has turned to Sage Therapeutics for its latest deal, close to a year after the crushing failure of Sage-217, now dubbed zuranolone, in the MOUNTAIN study.

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Pascal Soriot (AP Images)

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On the third straight Monday that the world wakes up to positive vaccine news, AstraZeneca and Oxford are declaring a new Phase III milestone in the fight against the pandemic. Not everyone is convinced they will play a big part, though.

With an average efficacy of 70%, the headline number struck analysts as less impressive than the 95% and 94.5% protection that Pfizer/BioNTech and Moderna have boasted in the past two weeks, respectively. But the British partners say they have several other bright spots going for their candidate. One of the two dosing regimens tested in Phase III showed a better profile, bringing efficacy up to 90%; the adenovirus vector-based vaccine requires minimal refrigeration, which may mean easier distribution; and AstraZeneca has pledged to sell it at a fraction of the price that the other two vaccine developers are charging.

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Bob Nelsen (Photo by Michael Kovac/Getty Images)

Bob Nelsen rais­es $800M and re­cruits a star-stud­ded board to build the 'Fox­con­n' of biotech

Bob Nelsen spent his pandemic spring in his Seattle home, talking on the phone with Luciana Borio, the scientist who used to run pandemic preparedness on the National Security Council, and fuming with her about the dire state of American manufacturing.

Companies were rushing to develop vaccines and antibodies for the new virus, but even if they succeeded, there was no immediate supply chain or infrastructure to mass-produce them in a way that could make a dent in the outbreak.

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Feng Tian, Ambrx CEO (Ambrx)

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The first time San Diego biotech Ambrx tried to go public in 2014, they failed and the company’s board switched to a radically different strategy: They sold themselves for an undisclosed amount to a syndicate of Chinese investors and pharma companies.

Now, after 5 quiet years, that syndicate has raised a mountain of cash and indicated they’ll soon make another bid to go public.

Earlier this month, Ambrx raised $200 million in what they billed as a crossover round financed by Fidelity, BlackRock, Cormorant Asset Management, HBM Healthcare Investments, Invus, Adage Capital Partners and Suvretta Capital Management. It’s the largest amount they’ve ever raised and, according to Crunchbase figures, more than doubles the total amount of VC capital collected since their launch 17 years ago.

Jason Kelly, Ginkgo Bioworks CEO (Kyle Grillot/Bloomberg via Getty Images)

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In mid-August, as Kodak’s $765 million government-backed push into drug manufacturing slowly fell apart in national headlines, Ginkgo Bioworks CEO Jason Kelly got a message from his company’s government liaison: HHS wanted to know if they, too, might want a loan.

The government’s decision to lend Kodak three quarters of a billion dollars raised eyebrows because Kodak had never made drugs before. But Ginkgo, while not a manufacturing company, had spent the last decade refining new ways to produce materials inside cells and building automated facilities across Boston.

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Michelle Longmire, Medable CEO (Jeff Rumans)

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The software provider recently launched three new apps for decentralizing clinical trials, and saw a 500% revenue spike this year. And it isn’t alone. Back in August, Science 37 secured a $40 million round for its virtual trial tech, with support from Novartis, Sanofi Ventures and Amgen. Patients and researchers are taking a liking to the online approach, suggesting regulators could allow it to become a new normal even after the pandemic is over.

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Instead of simply ruling out any chance of an approval, the logical conclusion based on what we heard during that session, a series of questionable approvals that preceded the controversy over the agency’s recent EUA decisions has come back to haunt the FDA, where the power of precedent is leaving an opening some experts believe can still be exploited by the big biotech.

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John Maraganore, Alnylam CEO (Scott Eisen/Bloomberg via Getty Images)

UP­DAT­ED: Al­ny­lam gets the green light from the FDA for drug #3 — and CEO John Maraganore is ready to roll

Score another early win at the FDA for Alnylam.

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An ultra rare genetic condition, Alnylam CEO John Maraganore says there are only some 1,000 to 1,700 patients in the US and Europe at any particular point. The patients, mostly kids, suffer from an overproduction of oxalate in the liver that spurs the development of kidney stones, right through to end stage kidney disease.

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Peter Thiel (Riccardo Savi/Sipa via AP Images)

Tech bil­lion­aire Pe­ter Thiel backs a lead­ing psy­che­del­ic drug de­vel­op­er

Right on the heels of investing in antibody drug developer AbCellera, Facebook billionaire Peter Thiel has jumped into a syndicate putting up $125 million for a company with a portfolio of psychedelic drugs in the clinic for mental health.

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