SQZ Biotechnologies has landed its largest venture capital round yet: a $72 million Series C financing that the Watertown, MA-based company hopes can bring some of its experimental cell therapies into the clinic.
SQZ has a technology that is able to squeeze cells (hence the company’s name) without killing them, enough to allow their membranes to open and allow proteins and other materials to enter. The biotech plans to use the money to continue its development of therapies for solid tumors and autoimmune disorders. In oncology, SQZ’s treatments aim to activate part of a patient’s immune system, the killer T cells, to seek out and destroy tumors. SQZ also has pre-clinical programs for type 1 diabetes and other autoimmune indications. SQZ did not offer an estimated timeline for bringing any of these drug programs into clinical trials.
Though SQZ’s drug programs are still early stage, its latest financing is yet another sign of the investor interest in cell therapy technologies. In February, Foster City, CA-based Gilead Sciences (NASDAQ: GILD) agreed to pay Sangamo (NASDAQ: SGMO) $150 million to use that company’s gene editing techniques to try to develop a variety of next-generation cell therapies for cancer. That followed a $12 billion bet Gilead placed a year ago when it bought Kite Pharma for $180 per share, to acquire the company’s then experimental cancer immunotherapy treatment. Known as CAR-T, the treatment involves removing a patient’s immune cells, modifying them into better cancer fighters, and re-infusing them into the body to find and kill cancer, as Xconomy previously reported. Soon after that acquisition, Kite’s CAR-T therapy won FDA approval.
A few months later, in January, Celgene (NASDAQ: CELG) paid about $9 billion to buy the 90 percent of cell therapy developer Juno Therapeutics that the Summit, NJ-based drug maker didn’t own. Despite recent regulatory progress for some cell therapies and continued investor interest in the technology, it still poses challenges. Manufacturing a cell therapy is more expensive than making a small molecule drug. Though these treatments can be effective for patients who have exhausted other treatment options, clinical studies also show that these therapies bring the risk of dangerous side effects. In addition, companies need to convince insurers that these drugs are worth the hefty price tags that they’ve slapped on their products.
The new funding for SQZ came from a both new and prior investors. New investors include Everblue, Illumina Ventures, Invus, Viva Ventures Biotech Group, and Orient Life. Earlier investors in the company are Bridger Healthcare Partners, Global Health Science Fund, GV, The JDRF T1D Fund, NanoDimension, and Polaris. SQZ said in a news release the investment round was oversubscribed.
SQZ also added two new members to its board of directors: Marc Elia, a partner at Bridger Healthcare, and Zafi Avnur, the chief scientific officer at Quark Ventures.