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

Xconomy Boston — 

A group of biotech veterans have debuted today a new company, Homology Medicines, with a bold claim that their underlying science is a better version of the gene editing methods, such as CRISPR-Cas9, that have captured the attention of patients, doctors, and scientists looking to treat desperate diseases.

The claim is, for now, untested, as none of the work has been published. One of the company’s backers says Homology will publish some of its findings soon.

Lexington, MA-based Homology has $43.5 million in Series A financing led by 5AM Ventures and Arch Venture Partners. Its top executives worked together for several years at rare disease drug specialist Shire (NYSE: SHPG).

No surprise, then, that the Homology group—CEO Arthur Tzianabos, chief operating officer Sam Rasty, and chief scientific officer Albert Seymour—aims to go after rare diseases first, possibly blood disorders like sickle cell disease. The startup says it has a technology that might be able to one-up current gene therapy and gene editing approaches.

“We see potential that’s enormous,” says 5AM managing partner and Homology board member Kush Parmar. Homology and its backers believe they can replace faulty, disease-causing genes with healthy ones, without the procedure backfiring and causing safety problems, which is a fear that looms over the development of other genetic surgery methods.

Gene editing is used by researchers to make genetic changes in practically any organism, from mice to pigs to corn to monkeys. There are three main kinds of gene editing; CRISPR-Cas9 is the easiest to use, which in short order since its discovery has made it a mainstay in labs the world over for all kinds of experiments.

But gene editing also has potential to fix a range of terrible genetic diseases. The most advanced form is called zinc finger nucleases from Sangamo Biosciences [NASDAQ: SGMO). Sangamo is conducting a Phase 2 trial to treat HIV infection and has the FDA’s green light to start trials in two other diseases, including hemophilia B. The gene editing technology TALEN will get its first clinical test this year if Pfizer and the French firm Servier move a cell therapy engineered with TALENs into Phase 1 trials for leukemia as planned. As Xconomy noted Friday, medicines based on CRISPR-Cas9 have not yet reached human trials but might next year. Editas Medicine (NASDAQ: EDIT), Intellia Therapeutics, and CRISPR Therapeutics are the three main biotech companies in the field.

Gene therapy, meanwhile—a method of shuttling genetic instructions into the body to provide a long-lasting treatment—has a much longer history than gene editing, dating back three decades. Still, only two gene therapies have been approved in Europe, and none in the U.S. The field has made technical advances but no real impact yet on healthcare.

Homology now says its method of genetic manipulation might have advantages over both gene editing and gene therapy. It says it can effectively recreate a natural biological process known as “homologous recombination,” which cells in humans and other species do to repair DNA damage or, in the case of bacteria, to improve their genetic diversity. In homologous recombination, one chromosome essentially swaps one short DNA sequence for another similar one. (Bacteria can actually swap genes by bumping into one another, which might be considered bacterial sex.)

Homology aims to use homologous recombination to “flip in a gene that’s normal for a gene that’s abnormal,” Tzianabos says.

The procedure will resemble certain types of gene therapy. Homology aims to engineer a piece of “healthy” DNA, pack it into a type of adeno-associated virus, or AAV—a delivery tool commonly used in gene therapy, and now CRISPR technologies as well—and infuse it into the body. In gene therapy, that virus typically gets into a cell and expresses a protein, such as a blood-clotting protein for hemophilia patients, until the cell dies. In Homology’s case, however, the virus carrying the DNA locks on to the cell that needs a genetic fix, enters it, and releases its DNA payload. The healthy DNA then swaps places with the faulty gene inside the patient’s cells. If and when the cells divide, the new cells would carry the fixed gene, not the faulty one. That’s the hope, at least.

The idea of using AAVs to cause homologous recombination isn’t new, however. “People have been working on it for many years,” says Dana Carroll, a genetics expert at the University of Utah. There are pros and cons to the approach, he says. There is no danger of causing 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.