Codiak BioSciences, the startup run by former Biogen (NASDAQ: BIIB) research chief Doug Williams, has rung up its third big round of cash in two years.
The Cambridge, MA, company has closed a $76.5 million Series C round from a large group of investors, among them founding backers Flagship Pioneering and Arch Venture Partners, and new participants EcoR1 Capital and Casdin Capital. The raise brings Codiak’s total to $168.5 million since its inception in 2015. It also includes “crossover” investors who back both public and privately held companies.
While a crossover round is typically a signal a company is laying the groundwork for an IPO, Williams demurred. “We’re not ready to talk about that,” he says.
Nonetheless, the funding further establishes Codiak as one of the more high-profile companies trying to use exosomes—tiny bubbles once thought to be simply cellular garbage bins—to develop drugs or diagnostics. Discoveries over the past decade or so have shown that exosomes are more than just cellular garbage cans. They contain plenty of important cellular material, including DNA, RNA, proteins, lipids, and other materials. They also exit and enter cells, dump their belongings, and influence how the cells they enter behave. That gives them plenty of possible uses.
To use exosomes in therapeutic applications, for instance, the idea is to load them up with some sort of drug—a small molecule or otherwise—and deliver it to the body. Evox Therapeutics, of Oxford, wants to use exosomes to deliver drugs to the brain. Exogenus Therapeutics, a Portugal-based startup, aims to use exosomes for wound healing.
“Investors are clearly seeing the versatility of exosomes as a therapeutic platform,” Williams says.
Still, none of these exosome-based drugs are in human trials. Diagnostics are further along. With an exosome diagnostic, companies aim to isolate exosomes from body fluids—exosomes are found in all of them—and analyze them for potential genetic signatures of disease. Cambridge-based Exosome Diagnostics is using this approach to sell tests meant to detect cancer from samples of blood or urine. Its first two tests, diagnostics for lung and prostate cancer, respectively, reached the market in 2016. Exosome Sciences, of San Diego, is trying to discover exosome-based biomarkers for Alzheimer’s disease and other neurological disorders.
When Williams left Biogen and joined Codiak in 2015, he told Xconomy the company would first try to make exosome-based drugs and diagnostics. Now, Williams says the company has chosen to focus its efforts exclusively on therapeutics. “We’ll look for a partner that can maximize the diagnostic opportunity,” he says.
Pancreatic cancer, a progressive and deadly cancer, is the first of Codiak’s targets—it’ll file papers to begin its first study by the end of 2018. Codiak has rights to an investigational pancreatic cancer drug discovered at the University of Texas MD Anderson Cancer Center. A team led by Codiak co-founder Raghu Kalluri, the chairman of cancer biology at MD Anderson, published a paper in Nature in June outlining how an exosome therapeutic could be used to target pancreatic cancer and the cancer-driving gene KRAS, which can’t be effectively reached by conventional drugs.