Ru­bius lands $120M bo­nan­za to fund a ground­break­ing pipeline ef­fort on a new drug plat­form

The peo­ple at Ru­bius Ther­a­peu­tics think they’re on to a game-chang­ing new plat­form for drug R&D, one that can spawn a wave of trans­for­ma­tion­al new med­i­cines. And they now have one of the biggest ven­ture cap­i­tal rounds in drug R&D this year to put their dreams to the test in a line­up of new pro­grams now head­ed for the clin­ic.

Seed­ed by Flag­ship Pi­o­neer­ing and ini­tial­ly backed with a $25 mil­lion A round in late 2015, Ru­bius to­day is un­cork­ing a $120 mil­lion in­vest­ment “to move a wave of prod­ucts in­to the clin­ic next year,” says Ru­bius Pres­i­dent Tor­ben Straight Nis­sen. Af­ter dou­bling the staff to 40 over the last 9 months, Ru­bius will now shoot for 100 over the next year.

Tak­ing a page from Mod­er­na — a Flag­ship start­up that at­tract­ed hun­dreds of mil­lions of dol­lars ear­ly on to fi­nance an­oth­er shot at a close­ly-watched break­through ef­fort — Ru­bius isn’t look­ing to prove what they can do with just one or two pro­grams. The team wants to lay out a full pipeline, prefer­ably with a cou­ple of ma­jor league part­ners com­ing in ear­ly to help lever­age the kind of fi­nan­cial fire­pow­er need­ed to ex­e­cute on what they be­lieve is a game-chang­er in biotech.

“We’re mov­ing for­ward on dif­fer­ent in­di­ca­tions and dif­fer­ent fea­tures that test the tech­nol­o­gy,” Straight Nis­sen tells me. The most ad­vanced are en­zyme re­place­ments ther­a­pies and new treat­ments for sol­id tu­mors and hema­to­log­i­cal ma­lig­nan­cies.

“We’ve pro­ject­ed that we’ll be in the clin­ic in 2018,” he says, adding that that is as spe­cif­ic as he wants to get on that top­ic right now.

The red-cell ther­a­py tech they have is de­signed to iso­late hematopoi­et­ic stem cells from O neg­a­tive donors and use them as the build­ing blocks for new ther­a­pies, ge­net­i­cal­ly en­gi­neer­ing them in­to red blood drugs that can ex­press a mul­ti­tude of pro­teins on the cells while they still have a nu­cle­us, mod­u­lat­ing them for pro­tein ex­pres­sion and then shed­ding the nu­cle­us as they switch on the ther­a­peu­tic qual­i­ties of the cell.

Es­sen­tial­ly, it’s a sci­en­tif­ic hi­jack­ing, tak­ing cells and turn­ing them in­to a new fleet of ther­a­pies.

David Ep­stein

The key chal­lenge right now, says Straight Nis­sen, is pick­ing the first wave for the pipeline from a large num­ber of po­ten­tial tar­gets. But this kind of al­lo­gene­ic ap­proach sug­gests a va­ri­ety of av­enues, in­clud­ing find­ing a new way to de­vel­op an off-the-shelf mech­a­nism to re­cruit a T cell at­tack on can­cer cells, hit­ting the tu­mor mi­croen­vi­ron­ment — ground ze­ro in the can­cer field — in a way that avoids un­con­trolled ex­pan­sion of T cells with po­ten­tial­ly cat­a­stroph­ic re­ac­tions.

Noubar Afeyan

Ru­bius in many ways rep­re­sents the kind of biotech gam­ble that Flag­ship wants to be­come known for. It draws on some in­spi­ra­tion from a mar­quee sci­en­tist — in this case MIT’s Har­vey Lodish — while build­ing on the tech­nol­o­gy in their Flag­ship Ven­ture­Labs and em­ploy­ing a big team led by in­dus­try pro­fes­sion­als to prove it works. In this case lead­ers in­clude Straight Nis­sen, who joined Ru­bius from Pfiz­er, as well as No­var­tis vet­er­an David Ep­stein, a new ex­ec­u­tive part­ner at Flag­ship who is tak­ing on the chair­man’s role.

Flag­ship is pro­vid­ing the cash, along with some silent in­sti­tu­tion­al part­ners. And you can bet they’re talk­ing to some ma­jor play­ers to see who would like to col­lab­o­rate on the cause.

The biotech is “fol­low­ing in the foot­steps of Flag­ship’s fam­i­ly of suc­cess­ful mul­ti­prod­uct plat­form com­pa­nies,” says Flag­ship CEO and Ru­bius co-founder Noubar Afeyan. And they have the cash now to find out just how far that path might lead.

A New Fron­tier: The In­ner Ear

What happens when a successful biotech venture capitalist is unexpectedly diagnosed with a chronic, life-disrupting vertigo disorder? Innovation in neurotology.

That venture capitalist was Jay Lichter, Ph.D., and after learning there was no FDA-approved drug treatment for his condition, Ménière’s disease, he decided to create a company to bring drug development to neurotology. Otonomy was founded in 2008 and is dedicated to finding new drug treatments for the hugely underserved community living with balance and hearing disorders. Helping patients like Jay has been the driving force behind Otonomy, a company heading into a transformative 2020 with three clinical trial readouts: Phase 3 in Ménière’s disease, Phase 2 in tinnitus, and Phase 1/2 in hearing loss. These catalysts, together with others in the field, highlight the emerging opportunity in neurotology.
Otonomy is leading the way in neurotology
Neurotology, or the treatment of inner ear neurological disorders, is a large and untapped market for drug developers: one in eight individuals in the U.S. have moderate-to-severe hearing loss, tinnitus or vertigo disorders such as Ménière’s disease.1 With no FDA-approved drug treatments available for these conditions, the burden on patients—including social anxiety, lower quality of life, reduced work productivity, and higher rates of depression—can be significant.2, 3, 4

Af­ter 4 years of furor, the FTC and New York state ac­cuse Mar­tin Shkre­li of run­ning a drug mo­nop­oly. And this time they plan to squash it

Pharma bro Martin Shkreli was jailed, publicly pilloried and forced to confront some lawmakers in Washington riled by his move to take an old generic and move the price from $17.50 per pill to $750. But through 4 years of controversy and public revulsion, his company never backed away from the price — left uncontrolled by a laissez faire federal policy on a drug’s cost.

Now the FTC and the state of New York plan to pry his fingers off the drug once and for all and open it up to some cheap competition.

Patrik Jonsson, the president of Lilly Bio-Medicines

Who knew? Der­mi­ra’s board kept watch as its stock price tracked Eli Lil­ly’s se­cret bid­ding on a $1.1B buy­out

In just 8 days, from December 6 to December 14, the stock jumped from $7.88 to $12.70 — just under the initial $13 bid. There was no hard news about the company that would explain a rise like that tracking closely to the bid offer, raising the obvious question of whether insider info has leaked out to traders.

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Short at­tack­er Sahm Ad­ran­gi draws crosshairs over a fa­vorite of Sanofi’s new CEO — with PhII da­ta loom­ing

Sahm Adrang Kerrisdale

Kerrisdale chief Sahm Adrangi took a lengthy break from his series of biotech short attacks after his chief analyst in the field pulled up stakes and went solo. But he’s making a return to drug development this morning, drawing crosshairs over a company that’s one of new Sanofi CEO Paul Hudson’s favorite collaborators.

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UP­DAT­ED: Ac­celeron of­fers thumbs up on a PhII suc­cess for would-be block­buster drug — and shares rock­et up

There’s no public data yet, but Acceleron $XLRN says that its first major trial readout of 2020 is a success.

In a Phase II study of 106 patients with pulmonary arterial hypertension (PAH), Acceleron’s experimental drug sotatercept hit its primary endpoint: a significant reduction in pulmonary vascular resistance. The drug also met three different secondary endpoints, including the 6-minute walking test.

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Civi­ca and Blue Cross Blue Shield launch new ven­ture to low­er gener­ic prices

Five years after Martin Shkreli put a smug face to the volatile prices companies can charge even for generic drugs, payers and governments are coming up with outside-the-box solutions.

The latest fix is a new venture from the Blue Cross Blue Shield Association, 18 of its members and Civica, the generics company founded in 2018 by hospitals fed up with high prices for drugs that had long-since lost patent protection. While Civica focused on drugs that hospitals purchased, the new company will aim to lower prices on drugs that, like Shkreli’s Daraprim, are purchased by individuals.

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Merck Invests in State-Of-The-Art Biotech Development Facility in Switzerland

Mer­ck KGaA match­es lofty R&D goals with €250M in­vest­ment in­to a new clin­i­cal man­u­fac­tur­ing site in Switzer­land

As Merck KGaA strives to prove itself as a capable biopharma R&D player, it has begun construction on a €250 million facility dedicated to developing and manufacturing drugs for use in clinical trials.

The German drugmaker chose a location at Corsier-sur-Vevey, Switzerland, where it already has a commercial manufacturing site, in order to “bridge together research and manufacturing.”

“This investment in the Merck Biotech Development Center reflects our commitment to speed up the availability of new medicines for patients in need, and confirms the importance of Switzerland as our prime hub for the manufacturing of biotech medicines,” CEO Stefan Oschmann said at the groundbreaking ceremony, according to a statement.

Breast can­cer ap­proval in tow, As­traZeneca, Dai­ichi armed an­ti­body scores in key gas­tric can­cer study

AstraZeneca kicked off Monday with a flurry of good news. Apart from unveiling positive results on its stroke trial testing its clot-fighter Brilinta, and welcoming its experimental IL-23 inhibitor brazikumab back from Allergan — the British drugmaker also disclosed some upbeat gastric cancer data on its HER2-positive oncology therapy it is collaborating on with Daiichi Sankyo.

Buoyed by the performance of its oncology drugs, last March AstraZeneca chief Pascal Soriot bet big to partner with Daiichi on the cancer drug, with $1.35 billion upfront in a deal worth up to roughly $7 billion. Roughly 8 months later, as 2019 drew to a close, the FDA swiftly approved the drug — trastuzumab deruxtecan — for use in breast cancer, months ahead of the expected decision date.

Sor­ren­to shrugs off an anony­mous pri­vate eq­ui­ty group’s $1B of­fer to buy the com­pa­ny

San Diego-based Sorrento Therapeutics isn’t going the M&A route — at least not today.

The biotech caused quite a stir when it put out word a few weeks ago that an unidentified private equity group was bidding a billion dollars-plus for the company. The news drove a quick spike in the company’s share price as investors hooked up for the ride — that didn’t happen.

The update sparked a 5% drop in the share price $SRNE ahead of the bell. It’s now trading just above $4, without any evidence that the $7 price looked like it was firm.