Six months ago the biotech startup Vtesse grabbed a $200 million upfront payout for their buyout deal with Sucampo, providing a nice endorsement for the Cambridge, MA-based Cydan group that spawned the company.
Now the execs at Cydan say their first effort at spinning out early-stage biotechs focused on extraordinarily rare and largely overlooked diseases is done.
It’s time for Cydan II, and the small operation — with seven staffers now — has just raised a fresh $34 million to make it happen. That figure tops the $26 million Cydan started out with in 2013.
Vtesse, with its lead drug focused on rare cases of Niemann-Pick type C1 disease, was a great example of what the team at Cydan can do. In the meantime, they’ve also ramped up a slate of new biotechs, like Imara, which is developing IMR-687, a novel treatment for sickle cell disease.
“Orphan genetic diseases are still very big,” Cydan CEO Chris Adams tells me. But unlike, say, cystic fibrosis or Duchenne muscular dystrophy or the other rare genetic diseases now in the public eye, Cydan wants to go where there are no or few other competitors looking to field a rival therapy.
Cydan has some of the deepest venture pockets in the business backing its R&D startup model. Longitude Capital is joining Cydan’s existing investors on the new round, joining fund leader New Enterprise Associates as well as Pfizer Venture Investments, Alexandria Venture Investments and Lundbeckfond Ventures. The same syndicate is available to bankroll Cydan II’s startups, once they have something ready for the clinic. And Adams says he expects the new venture will get 4 to 6 new companies off the ground in the next couple of years.
Along with the new cash, Cydan is also expanding its team. Adams has brought in Shi Yin Foo, the former CMO at Bristol-Myers sub Cardioxyl, as chief medical officer. Niels Svenstrup joined as vice president of development.
When Cydan’s team finds the right discovery program, they will typically want to do an extensive due diligence program, running a new preclinical study to see if they can match up results and validate expectations. Once in the clinic, these companies share the kind of development profile that quite a few buyers in the market like to kick the tires on.
“We have a couple of deals lined up,” says Adams. “We’ll see what happens by the end of the year.”
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