Like water spewing from a firehose, venture dollars are dousing life-science startups this week. The latest biotech on the receiving end is Rubius Therapeutics, a cell therapy developer that announced a $100 million round this morning.
With the new cash, a “crossover” round including investors that back both private and publicly traded companies, Rubius has now raised $220 million from founding backer Flagship Pioneering and others in nine months. Rubius president Torben Straight Nissen said the company is funded by institutional biotech investors and “some of the largest mutual funds in the world,” but wouldn’t provide specifics.
The cash and investor base appears to put Cambridge, MA-based Rubius, formed in late 2015, on a quick path towards Wall Street; crossover rounds regularly prime biotechs for an IPO. Straight Nissen demurred, saying an IPO is “always a strategic consideration” for a private company.
“We’re focused on executing on our business plan,” he said.
The financing is the latest in a slew of recent funding announcements for privately held biotechs. From new startups like Quentis Therapeutics ($48 million), Senti Biosciences ($53 million), and Viela Bio ($250 million) to more advanced ones such as Generation Bio ($100 million) and Rubius, life-sciences companies have raked in more than $600 million so far this week, with more on the way.
Those numbers continue a trend. The 2017 Venture Monitor report released in January by PitchBook and the National Venture Capital Association reported that U.S. life-sciences companies raised $17.6 billion in 2017, the highest in a decade. The previous high was $14.6 billion in 2015, according to the NVCA.
Bruce Booth, a partner at biotech startup creator Atlas Venture, says this spike in funding is a reflection of greater interest by public crossover, generalist, and non-U.S. investors in innovative, emerging venture-backed biotechs. Their participation has led to larger funding rounds at higher valuations.
“This is great for the sector if [the money] is deployed wisely and into programs that deliver value for patients,” Booth said. “But if spent in an undisciplined manner, or if companies are over-capitalized relative to their R&D progress, this could lead to challenges in the future.”
He also cautions that the IPO market has to remain receptive to biotechs for the momentum to continue.
Rubius engineers human red blood cells into tiny vehicles that carry disease-fighting proteins into a patient. The company is pursuing an “allogeneic” or “off-the-shelf” technique, meaning the red blood cells are being harvested from a donor for use in any patient.
The current T-cell cancer therapies on the market, by comparison, are autologous—that is, each patient is the source of the cells for his or her own treatment. It’s a cumbersome and expensive process that many companies want to improve, or potentially replace with less expensive off-the-shelf alternatives.
The fear with allogeneic therapies, however, is they may trigger a dangerous immune attack. Rubius is trying to circumvent immune reactions by using red blood cells from O-negative donors, who are compatible with all major blood groups. The hope is these treatments, which Rubius calls red-cell therapeutics, will broaden the reach of cell therapies, which are currently niche products approved for patients with one of a few blood cancers who have run out of options.
Rubius aims to develop cancer therapies, treatments for rare diseases—in which, for instance, a red cell could deliver a missing, critical enzyme—or autoimmune diseases. It hasn’t disclosed its lead program as of yet, but Straight Nissen said Rubius should begin its first human study within the next year.