Follica, the Biotech With Potential Drug Against Baldness, Nabs $7.5M Venture Financing

Xconomy Boston — 

(Updated—6:15 pm ET, 6/01/10) Follica has raised more money for its quest against hair follicle disorders like male pattern baldness. The biotech startup, which is developing drugs that could spur the formation of new hair follicles, has raised $7.5 million in equity financing, according to an SEC filing.

Daphne Zohar, a Follica co-founder and managing director at PureTech Ventures in Boston, says the funding mentioned in the SEC filing is part of the startup’s Series B round of funding. The new cash came from Follica’s previous backers, which include PureTech, InterWest Partners, of Menlo Park, CA, and Waltham, MA-based Polaris Venture Partners. The Series B round was initially announced as an $11 million financing back in 2008, but Zohar says that was not the actual amount raised at the time and this latest infusion of capital brings the total round to $13 million. (Editor’s note: this paragraph was changed from the originally published version to include additional details from Zohar about the total amount raised in Follica’s second round of financing.)

“The investors are pleased,” Zohar said. “Things are going really well—it’s really exciting.”

Exactly how much progress Follica has made in developing a new hair-loss therapy, or whether baldness is the number-one target in its pipeline, Zohar wouldn’t say. The policy of the firm, she said, has been not to comment in detail on R&D activities. (Here’s an update on the firm’s status that Xconomy posted back in January.)

I did learn from Zohar that the company’s headquarters are now in Mendham, NJ, and have been since drug industry veteran William Ju took over as the firm’s CEO last year. Yet the firm continues to conduct drug-delivery and device research as well as corporate development in Boston, she said. Ju was not immediately available for comment this afternoon.

Unfortunately, this funding news doesn’t provide any new clues about whether Follica is much closer to bringing to market a treatment for baldness. Judging from the frenzy of interest in our previous Follica posts, it’s clear that many people are excited about the firm’s approach of generating new follicles to grow shoots of hair. Its technology, which is licensed from the University of Pennsylvania, could also be used to deliver permanent removal of unwanted hair.

If anything, we could hold out hope that more money for Follica means it has a greater chance of advancing its much-anticipated treatments for hair loss.

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29 responses to “Follica, the Biotech With Potential Drug Against Baldness, Nabs $7.5M Venture Financing”

  1. chad says:

    My guess is that the quieter things are, the farther it is from commercial viability.

    I really don’t want a hair transplant…

  2. Shooter says:

    Meh, just another one of “those” articles.

  3. Zarko says:

    “The investors are pleased,” Zohar said. “Things are going really well—it’s really exciting.”

    Hahaha, they are so pleased that they are giving them less and less money.
    I don’t know. I don’t see it in number of years(if all), no matter how bad it sounds.

  4. rev says:

    They should change their name to Fraudica

  5. ughh says:

    Does anyone know the significance of this being an Equity finance as opposed to debt? Does this imply that they expect to have cashflows in the near future and are trying to divy up ownership in the company. Why would investor ask for equity if there is no up side??

  6. Shooter says:

    Don’t really know the significance other than to say a company that has no income (and isn’t likely to ever have income) probably doesn’t want to be taking out a lot of debt. They’d rather just sell ownership.

    There is clearly something that investors see in this company, but they are hellbent on keeping it a secret. My guess is that they are banking on a hair removal procedure. It isn’t going to make the money that a baldness cure will, but it’ll make a helluva lot more than 16 mill or whatever they dumped into this company.

  7. ughh says:


    I agree with you on the hair removal procedure. After all its easier to destroy something than create it.

    I don’t know much about venture capital and bringing a company to market but I am pretty sure that equity gets wiped out before debt. So if they couldn’t pay their debt, the equity would be worthless. Debt also has tax benefits. Plus it sounds as if the equity was sold to the same investors who funded the debt.

  8. Shooter says:

    I wasn’t aware Follica used any debt financing in the past.

  9. ughh says:


    you are probably right. i was trying to be optimistic but it sounds as if this article is filled with negative tidbits. no announcement of a trials or new science. their primary target might not be mpb. they aren’t really working out of the boston office and the nj office seems to be one guy in one room. yeah! mpb sucks. 12 year since propecia and not even a complimentary treatment forget about cure.

  10. chad says:

    from a business perspective, I don’t blame the decision to keep its product and progress secret.

    but as someone who is considering (and indeed saving up for) a hair transplant, it would be nice to know whether I should hold off for a cheaper and/or more comprehensive treatment.

    frustrating. but at least we do have options. we can only wait to see if these new concepts materialize into something. remember, propecia and minoxidil were accidental discoveries.

  11. Metsie says:

    Hair removal ? Great, I’ll still look like Freakin Bozo with nice eyebrows and a smooth back.

  12. drip drops says:

    well lets look on the positive side… a news after a year and talks about more investment in the company…. nothing to complain about right?

    i was believing that follica failed big time

  13. DBS says:

    I haven’t posted in some time because there wasn’t anything to discuss. I guess this article changes that somewhat, but not much. On the positive side, there must be some sort of progress in order to get more money, but the money they raised will only go so far. On the negative side, it looks like Follica is a long way off from something good. Se la vie.

  14. j says:

    I really dont understand all the negativity…really I dont!! NOBODY knows what the hell follica is doing for sure so everyone saying negative things can just keep quiet! She said they are getting more funding and moving forward quickly, so I dont see any negative only positive from that!! We know nothing!! they could have something in a year or 5 years …we just dont know!! But this news sounds great to me and any idiot that is thinking of a trasplant better THINK AGAIN!!!! I had one about 5yrs ago and gave me a huge scar on my head cost me thousands and did nothing to help me!!! its only common sense that taking a LITTLE hair from the back of your head WILL NOT fill in A LOT on top of your head!!! lets keep watching things cause I think follica will give us something in the near future!

  15. bboy says:

    maybe they’re keeping quite so someone doesn’t take a big ass law suite out on them like what happened to histrogen.

  16. chrome dome says:

    This round of $7.5M buys Follica 18 months. Then we’ll see another round of about $7.5M for another 12 months. Same happy reply from Daphne. Then it’s go time for FDA review?

  17. Ryan says:

    chrome dome, if what you are saying is what happens then we can forget about Follica being anywhere near coming to market for the next decade. As far as we know they haven’t started any human trials and the average length of time from clinical trials to review is just under 6 and a half years, and using the FDA fast track wouldn’t make much difference either.

  18. JS says:

    I think I’ll be posting in here now that the other thread has been hijacked. Interesting link that Ryan, thanks for putting it up.

  19. j says:

    Ryan this is not a drug…its a medical treatment/procedure. and everything in the procedure is already approved. our best bet is to follow Histogen since they expect theirs to be ready in a few yrs outside the US

  20. BS says:

    they have been studying this subject for like 3 years now and investment is still coming in their pocket.. do you really think that they didnt make a trial on humans in these 3 years and investment is still being injected? think again ;)

    i think theres hope in their treatment… of course they need more study and time to perfect the outcome.. but Follica is still in the game, as it is Histogen and Aderans… though my bet goes on Histogen for now.

  21. D korngold says:

    LOL Daphne Zohar is the head of Investtech, which is responsible for “part” of the cash infusion? This company is about as clearly a fraud as it comes

  22. j says:

    D korngold what do you mean? who is a fraud?
    explain with more detail what you are talkking about and how do you know this??

  23. Ryan says:

    I think you’re wrong there D Korngold, if this is the company you’re talking about then she’s not part of the management team.

    Maybe you’ve gotten it mixed up with Puretech, that’s the company she is involved with.

  24. rev says:

    Shooter – great find. Aderans is certainly forthright with its results and its operations. I respect their candor.

    Joshua – I respect your candor as well. In fact, I’d like to add a tip to your list: 7. Take a can of spam, and shove it up your ass.

  25. Cure says:


    I would like to learn more about the role that the co-founders (Price, Cotsarelis, and Anderson) still have in the day to day operations of the company. Are they still active in the research portion of the company, or associated by name only?


    This is all easily obtainable info for the Google proficient.

    I stumbled across a less publicized name associated with Follica.

    John Zawad became Managing Partner at PharmAboard Partners in May 2009. He is currently the senior business development advisor at Follica. In May 2009, Follica also brought in William Ju as CEO. Take from it what you will, but I see it as a positive correlation. In my belief, the personnel they are hiring are representative of a company trying to bring something to clinical trials/market.

    Oh yea, Cotsarelis, Zawad, and Ju have all been associated with UPenn at different times in the past. I guess friends stick together, or at least those associated with a terrific tier 1 research institution.

    Second, as of last month Follica has posted a help wanted ad at for the position of Research Associate. At least they are hiring?? For the best of me, I have not been able to find any info on human clinical trials. Only dated and vague references to human pilot studies.

    Historical Time Line:

    -Follica Inc. was incorporated
    -Cotsarelis Patent (60/665,857)”

    -Cotsarelis Patent (60/847,854)

    -Cotsarelis wounding-hair procedure published in Nature (bald-man hysteria begins)

    -Cotsarelis Patent (61/114,028)
    – $5 mil series A & $11 mil series ($7.5 supplemental brings round B to $13 mill)

    May 2009
    -Follica Inc. hires Ju as CEO, Zawad as business consultant

    May 2010
    -Follica hiring additional personnel

    Profile PharmAboard:

    “PharmAboard Partners LLC is a leading life sciences consulting firm that helps new and emerging biotech businesses mitigate risks by optimizing the value of intellectual property and technology, defining the right product development approach (including clinical and regulatory strategies) and putting in place the right people and processes to optimize implementation.”

    Profile John Zawad:

    “John is an experienced business development/venture investment professional working with companies to develop their product portfolios and grow through partnering, licensing and M&A. He has over 20 years of sales, marketing, competitive intelligence, licensing, business development and venture investment experience in the pharmaceutical biotechnology industry…He headed up Technology Transfer & Intellectual Property at the University of Pennsylvania where he was responsible for the commercialization of intellectual property emanating from research at the university including the creation of new companies.”


  26. Shooter says:

    Chrome Dome, I missed your post before. Where did you get that information? Are you speculating? The SEC filing says the 7.5 million is expected to last “less than a year” so the 18 months estimate might be a little off.

  27. fool-aid says:

    Maybe some day someone will invent phallica.

  28. Poster says:

    Follica received a federal grant totaling $488,000 towards expenses incurred in 2009.

    Follica Incorporated Drug Delivery Program for inducing Follicular Neogenesis for Scarless Wound Healing $ 237,563.01 $ 6,916.23

    Follica Incorporated Clinical Program for Inducing Follicular Neogenesis for Scarless Wound Healing $ 244,147.19 $ 332.05,,id=229001,00.html

    Obama doesn’t know it, but his stimulus package (which includes this grant program) is helping cure baldness.