Venture Capital

Sucking up talent out of Novartis, a booming Rubius adds another $100 million mega-round to the kitty

Just 8 months after putting the finishing touches to a $120 million round, Flagship startup Rubius Therapeutics is back at the money well, drawing up another big mega-round of $100 million.

Torben Straight Nissen

This time, with more than $220 million to the good since jumping off the starting line, Rubius describes the raise as a “crossover round.” So does that mean that there’s an S-1 under construction?

Not exactly.

“We’re considering all options,” says CEO Torben Straight Nissen. As for an IPO, that’s one of several routes that could be open to the company — when the time is right.

Unusually, the biotech is not spelling out where the cash is coming from. All that the CEO is willing to say is that the syndicate includes “some of the largest mutual funds…as well as other major investors.”

A few years ago it would have been a virtual mission impossible to gather more than $200 million for a biotech that has yet to file its first IND. But Flagship chief Noubar Afeyan has been one of the leading proponents of a move to find new platform companies with big potential for some game-changing technology and then coming up with the big money needed to build a full pipeline of therapies, rather than one or two pilot projects to demonstrate their potential.

Noubar Afeyan

It’s a high risk, high reward strategy that has been pursued aggressively by Moderna, another Flagship company which just added $500 million on a $7 billion valuation — well ahead of pivotal data.

Whatever limit there may be to investor appetite for biotech risk, we aren’t seeing it yet. In the past 72 hours we’ve tracked more than $650 million in new investments in the field, with the money scattered in Cambridge/Boston, the Bay Area, Maryland and New York. The $250 million raised for a new AstraZeneca spinout came from three new Chinese investors, who are bursting on the scene with more cash for qualified syndicates. And this is the second $100 million raise this week.

The R&D plan at Rubius is to push ahead with some lead enzyme replacement therapies being spawned on a platform that seeks to develop a brand new class of cell therapies.

The big idea at Rubius is that researchers can take red blood cells — designed by nature to transport oxygen — hijack them through genetic engineering tech and get them to carry proteins needed to fight various diseases. It’s an off-the-shelf approach, rather than one personalized for each patient.

Developing a new class of medicine, though, calls early on for some pricey manufacturing capacity. And after establishing a supply line with CMOs, Rubius is doing some calculations on how it should construct its own in-house process.

“Clearly,” says the CEO, “one of the explorations is build or buy.” And they don’t have to stay too close to home in Cambridge, MA. Other locations in or around Boston and the rest of Massachusetts could serve.

The staff, meanwhile, has already grown to 67, which includes adding a manufacturing chief. Spencer Fisk jumped to Rubius just a few days ago, joining what seems to be a steady migration out of Novartis’ cell and gene therapy operation. He was the global head of Cell and Gene Technical Development and Manufacturing. Fisk took the place of Karen Walker, who left for Seattle Genetics last spring. Walker had, in turn, become one of three key managers in the cell unit at Novartis, which was thoroughly reorganized about two years ago, when Usman “Oz” Azam left the helm to run a cell therapy startup.

It’s a small world in the cell therapy field. Now Fisk is working at a biotech where former Novartis cancer chief David Epstein is executive chairman.

Bursting at the seams, Rubius is also now moving into 45,000 square feet in new digs at 399 Binney. By this summer, he adds, the staff should be up to around 100 — no small affair.

Image: 399 Binney Street (Alexandria Real Estate Equities)

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Research Scientist - Immunology
Recursion Pharmaceuticals Salt Lake City, UT
Director of Operations
Atlas Venture Cambridge, MA

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