Two years ago, San Diego-based Cebix closed up shop after CEO Joel Martin and his crew took a thorough look at the data from a Phase IIb diabetes drug study and concluded it was a bust. They swiftly wrapped up the company, but they never burned their bridges with a key backer.
Mike Powell and the partners at Sofinnova Ventures were left deeply impressed with Martin and his team and the way they carried out the study, which “we really crushed,” Martin tells me. It was the kind of precision, he says, that outdid anything they had seen before.
So they took their lemons and made some biotech lemonade.
Sofinnova came back in and bankrolled a new effort by Martin and his team to start bringing in assets from academia and industry, taking an asset-centric approach to creating a portfolio of experimental drug programs, leaving themselves flexible to do deals along the way.
Initially, Sofinnova offered $8 million to get the new venture — Dauntless Pharmaceuticals — up and running. And now that A round is being bumped to $33 million as Sofinnova and Canaan Partners step in to bankroll the biotech as it expands the pipeline and advances in the clinic.
Dauntless’ lead drug, DP1038 — reformulated octreotide acetate, a synthetic peptide for somatostatin, which uses an intranasal dose — is moving ahead in Phase I, applying delivery tech in-licensed from Aegis Therapeutics. There’s also a stealth program dubbed Dauntless Two which has been added.
Like their first effort, Dauntless Two will move ahead under the guidance of the small group that makes up Dauntless’ management.
“I’m a big fan off doing virtual drug companies,” says Martin. Internally, the crew at Dauntless is 6 people, all senior level execs, but at any one time there are 50 more working at CROs on their behalf. And they have years-long ties with the people who can make a big difference in nailing down a study.
There are a number of operations that have rolled out a version of this play. Versant’s Inception is one, though they also have their own extensive labs; San Diego-based Avalon likes to bring in assets under its umbrella.
“The asset-based model allows you to transact around that asset,” says Dauntless BD chief Karen Basbaum. You can leverage the team’s experience without getting locked in to any one program.
Martin’s goal now that he has the added cash is to have four programs underway at any one moment, doing deals on drugs and bringing in new ones as they keep up the same overall level of activity.
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