Xontogeny, the Boston-based biotech startup accelerator formed by one-time Sarepta Therapeutics CEO Chris Garabedian, has taken on its first company. The firm has helped secure a $10 million investment for a Blacksburg, VA, startup, Landos Biopharma, that is developing drugs for inflammatory bowel disease.
New York life sciences investment firm Perceptive Advisors is the sole investor in Landos’s Series A round. Perceptive was also Xontogeny’s only investor when it raised a $25 million round earlier this year.
Xontogeny was formed to help fledgling biotechs progress experimental programs from preclinical research through proof-of-concept studies. Garabedian (pictured), a former Gilead Sciences (NASDAQ: GILD) and Celgene (NASDAQ: CELG) dealmaker before his controversial stint as Sarepta’s CEO, is serving as a mentor and advisor to the accelerator’s startups. Garabedian is joining Landos’s board, for instance, and will also be a business advisor to the company. He says he will bring his expertise and his rolodex of industry contacts to support Landos and other Xontogeny companies.
Landos is targeting Crohn’s disease, an autoimmune disorder characterized by inflammation in the digestive tract. Treatments for Crohn’s and other autoimmune conditions include infusible or injectable biologics like the blockbuster drug adalimumab (Humira), which blocks a protein, tumor necrosis factor, implicated in inflammation. Blocking TNF, however, can raise a patient’s risk of infection, according to the American College of Rheumatology.
Landos is instead focusing on a pathway called Lanthionine Synthetase C-Like 2 (LANCL2), which is found in the cells in the gastrointestinal tract, says Josep Bassaganya-Riera, the company’s founder and CEO. Bassaganya-Riera, a Virginia Tech professor who has spent nearly 20 years researching autoimmune disease and inflammation, says activating this pathway decreases the production of pro-inflammatory molecules in the gut—just as TNF blocking drugs do. But he adds that the Landos drug, a pill called BT-11, goes further by also increasing the production of anti-inflammatory molecules. The hope is the approach, which has yet to be tested in humans, will prove safer than other IBD treatments.
The Virginia Tech research upon which Landos is based was published last year in the Journal of Medicinal Chemistry. With the new funding, Landos aims to complete the work needed to bring its compound into human testing. Phase 1 studies are expected to begin by early 2019.
Garabedian says Landos represents the kind of company he wants to bring into his biotech accelerator: technology that has a lead disease target and some preclinical testing showing it can hit that target. He says he’s also looking for evidence a compound could differentiate itself from other treatments, as BT-11 may be able to do, if successful, in Crohn’s disease. Though Crohn’s disease is the company’s first target, the company plans to develop drugs for rheumatoid arthritis and diabetes as well.
Garabedian says that as Xontogeny builds its portfolio with additional companies, those startups will share the accelerator’s resources. This approach should be more efficient than that of some venture capital firms, he says, that bring in a “CEO for hire” who builds out the rest of the management team. For example, a small company like Landos does not need a full time executive to handle regulatory matters, Garabedian says. Instead, Xontogeny will have a head of regulatory affairs whose time is divided among all of the accelerator’s companies.