14 WEEK OF MARCH 9, 2015
FINANCEREGULATION
EMERGING
COMPANIES
STRATEGY
BIOCENTURY TOC
FINANCE
“We knew them well, and we felt that it was as good as a company we
had started ourselves,” said Svennilson, adding that it was a “very good
example of how we want to build our companies.”
Flexus is going after several targets in cancer immunotherapy and has
multiple platform technologies.
“We come up with our ideas in constant brainstorming sessions with our
science partners,” he said.
“We challenge each other to come up with the new breakthroughs in
development that will yield the most exciting areas for research over the
next 5-10 years. That’s how we started NGM, to go after the observation
in bariatric surgery that the metabolic syndrome had been alleviated. It’s
how we started Constellation.”
Epigenetics play Constellation Pharmaceuticals Inc. is developing small
molecule inhibitors of epigenetic targets, including a lead compound in
Phase I testing targeting BET bromodomains. Genentech has an option
to acquire Constellation under undisclosed terms.
NGM Biopharmaceuticals Inc. is using its high throughput discovery
platform to discover biologics for diabetes, obesity, muscle wasting and
other cardiometabolic diseases.
“When we went into metabolic disorders, not many other venture
investors were investing in metabolic disorders because of the clinical
development times and the cost of developing these drugs as a small
biotech company,” said Svennilson. “But we found the research in that
area was very exciting and novel and didn’t hesitate to build a company
like NGM.”
Last month, NGM and Merck & Co. Inc. announced a deal that gives
Merck options to license multiple preclinical candidates from NGM,
including cardiometabolic and cancer programs. Merck will pay NGM
$94 million up front, purchase a 15% equity stake for $106 million, and
provide up to $250 million in R&D funding over five years.
It’s not an exit, but Svennilson said the deal will pay for most of the costs
of developing NGM’s pipeline over the five years. “We intend to see this
partnership through and see what the company looks like then,” he added.
TCG has invested roughly $50 million in NGM, making it the largest
stakeholder, with about 21% of the company; Merck is now the second
largest investor.
Other portfolio companies from the first fund include cancer vaccine
play Immune Design Corp., which raised $60 million in an IPO last year,
plus cancer companies Igenica Inc. and Peloton Therapeutics Inc. and
ubiquitin proteasome play Nurix Inc.
Svennilson said the firm has so far closed down one company, which was
developing a prodrug approach for cancer. TCG invested $4.5 million in
Cyterix Pharmaceuticals Inc. before winding down operations.
SECOND COLUMN
The firm has made five investments from its second fund. Besides Flexus
and NGM, the portfolio includes oncogene play Eector Therapeutics
Inc., which Lasky helped launch while at USVP.
TCG has disclosed few details on the two newcos launched from the
second fund. One is cancer company ORIC Pharmaceuticals Inc.,
which Svennilson said is working on overcoming resistance mechanisms
in cancer. The other is CNS play Neurona Therapeutics Inc., which is
based on science from the University of California San Francisco on
interneurons and neuronal stem cells.
“We don’t need to see a drug lead program crystallized early on,” said
Svennilson. “We bet on the people and the quality of the research and see
what comes out of it over the longer term.”
COMPANIES AND INSTITUTIONS MENTIONED
Amgen Inc. (NASDAQ:AMGN), Thousand Oaks, Calif.
Bristol-Myers Squibb Co. (NYSE:BMY), New York, N.Y.
The Column Group, San Francisco, Calif.
Constellation Pharmaceuticals Inc., Cambridge, Mass.
Eector Therapeutics Inc., San Diego, Calif.
Flexus Biosciences Inc., San Carlos, Calif.
Genentech Inc., South San Francisco, Calif.
Igenica Inc., Burlingame, Calif.
Immune Design Corp. (NASDAQ:IMDZ), Seattle, Wash.
Johnson & Johnson (NYSE:JNJ), New Brunswick, N.J.
Merck & Co. Inc. (NYSE:MRK), Whitehouse Station, N.J.
Neurona Therapeutics Inc., San Francisco, Calif.
NGM Biopharmaceuticals Inc., South San Francisco, Calif.
Nurix Inc., San Francisco, Calif.
ORIC Pharmaceuticals Inc., San Francisco, Calif.
Peloton Therapeutics Inc., Dallas, Texas
Roche (SIX:ROG; OTCQX:RHHBY), Basel, Switzerland
University of California San Francisco, San Francisco, Calif.
REFERENCES
Cukier-Meisner, E. “ARrangement for antagonism.” BioCentury (2013)
Cukier-Meisner, E. “Less unSERDainty.” BioCentury (2014)
McCallister, E. “Playing turnabout.” BioCentury (2010)