With $43.5M Startup Cash, Homology Med Chases New Gene Editing Twist

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mutations in the target DNA and thus something such as cancer, but the efficiency—the likelihood of getting the desired gene swap—is “significantly lower” than homologous recombination caused by gene editing.

The key “big leap,” says Homology CEO Tzianabos, is in the efficiency of specific types of AAVs discovered by Saswati Chatterjee, a virology professor at the Beckman Research Institute at the City of Hope in California. Chatterjee, a scientific founder of Homology, published her discovery in the journal Molecular Therapy in 2014.

The big difference between Chatterjee’s AAVs and others often used in gene therapy programs—AAV5, AAV8, and so on, developed or owned by companies such as RegenXBio (NASDAQ: RGNX)—is their ability to transfer DNA to their targets and cause homologous recombination. “The kind of efficiency rates we’re seeing will allow us to translate into something that we believe is going to be clinically meaningful for patients,” Tzianabos says.

He says the Chatterjee AAVs, which Homology has an exclusive license to, also seem less likely to trigger an immune response.

Human clinical trials will put Homology’s claims to the test, but Tzianabos won’t say how far the company needs to go to reach those trials. Homology believes its approach might prove less risky than other forms of gene editing. CRISPR, zinc fingers, and TALENs all use a pair of molecular scissors to cut DNA and force the cell to make a repair that fixes or deletes the genetic defect, but if the scissors cut in the wrong place, could they instead create a new mutation—and thus a cancer risk? It’s a big debate right now in the field.

Tzianabos says that instead of “introducing all kinds of breaks” in DNA, Homology’s AAV approach triggers “natural cellular recombination mechanisms” without cutting DNA.

“A lot of things can happen once you create that break,” Parmar says. “There’s a serious effort to try to control that, but it’s a real challenge.”

A lack of published data obviously hasn’t deterred big biotech venture firms from making a big bet on Homology, which now hopes to follow the recent fortunes of the  companies working with CRISPR to create new therapies. Editas, backed by big-name investors including Bill Gates, went public in February only two years and change after it emerged from stealth. It is valued at more than $1 billion and has a partnership with Juno Therapeutics (NASDAQ: JUNO). Intellia has raised more than $150 million in equity sales and licensing fees, is aligned with Regeneron Pharmaceuticals (NASDAQ: REGN) and Novartis (NYSE: NVS), and is expected to go public this week. It would not be a surprise to see CRISPR Therapeutics, with deals in place with Vertex Pharmaceuticals (NASDAQ: VRTX) and Bayer, file for an IPO soon, as well.

Temasek, Deerfield Management, and Arch Overage Fund also participated in Homology’s round, meanwhile. Arch managing director Steven Gillis and ImmunoGen (NASDAQ: IMGN) chief scientific officer Richard Gregory are on Homology’s board along with Parmar and Tzianabos.

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