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Biotech Vet Gerngross Dishes Out More Details On Latest VC-Backed Startup Arsanis

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$400 million in 2006 and its yeast-based system for engineering protein drugs is a key technology in Merck’s effort to develop generic biotech drugs. And Adimab has been on a successful path with multiple pharma deals under its belt and a stable of high-profile investors like Google. In November Gerngross told me that Adimab raised $4 million in a fifth-round financing at a pre-money valuation of about $520 million—a huge number for a four-year-old biotech startup.

Arsanis is a clear signal that Gerngross and his investors plan to continue the strategy of starting new companies to focus Adimab’s technology in specific fields. Indeed, he says that they are also looking at opportunities to start new biotechs dedicated to other treatment areas such as central nervous system diseases and, yes, cancer.

Carl Gordon, a founding general partner at Orbimed in New York, says that he is on board with this strategy after having invested in Adimab and the newer Arsanis.

“Adimab is focused on services,” Gordon says in an e-mail. “We thought it made sense to create product-focused spinouts of Adimab, to create value with a different business model. We believe infectious disease offers a lot of opportunities for antibody drug development.”

Others in the biotech world agree with this. For example, the German biotech MorphoSys said in September that it was licensing targets from Absynth Biologics in the UK to aid in its discovery of antibody drugs for bacterial invaders, with plans to develop treatments for major infections like the “super bug” MRSA, which can withstand attacks from old standby antibiotics such as methicillin.

Both MorphoSys and Adimab say that their technologies yield fully human antibodies to fight illnesses. Adimab, however, has attracted a lot of attention for its engineered-yeast-based system because it doesn’t require its antibodies to be harvested from as many hosts—such as mouse cells, Chinese hamster ovary cells, and E. coli—to get to a molecule that is ready to test in humans. This technology might reduce the time needed to yield quality antibody candidates that can home in on the desired disease proteins really well without causing serious side effects.

We’ll have to see how well this technology can translate into effective anti-bacterial drugs.

“Existing approaches aren’t working,” Gerngross says. “We think that antibodies have a real opportunity to make a difference here.”

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