Exosomes Head to Wall Street As Codiak Biosciences Lines Up IPO

Xconomy Boston — 

Do Wall Street investors believe that exosomes, the tiny bubbles once thought to be just cellular garbage bins, may be the key to treating a slew of potential diseases? The coming IPO for Codiak Biosciences will present a test case.

Codiak, a Cambridge, MA, company run by former Biogen (NASDAQ: BIIB) research chief Doug Williams, outlined plans late Monday for an IPO. The proceeds would back Codiak’s plan to use exosomes as tools to deliver drugs into the body. Codiak has yet to test the approach in humans; its first clinical tests are expected to begin next year. Codiak will trade on the Nasdaq stock exchange under the symbol “CDAK” if it completes the IPO.

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 substances. They also exit and enter cells, dump their belongings, and influence how the cells they enter behave. That theoretically gives them plenty of possible uses. Codiak noted in its IPO prospectus, for instance, that exosomes may help get to targets inside of cells that have historically been “undruggable” by other means. Additionally, they could potentially expand the reach of other, newer drugmaking methods like RNA interference or CRISPR gene editing, Codiak said in the filing.

The most advanced use for exosomes, so far, is for diagnostics. 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, which Bio-Techne bought for $250 million last year, has been using this approach to sell tests meant to detect cancer from samples of blood or urine. Exosome Sciences, of San Diego, is trying to discover exosome-based biomarkers for neurological disorders.

Attempts to use exosomes for therapeutics are less proven. Startups like Evox Therapeutics, of Oxford, UK, and Exogenus Therapeutics, of Portugal, are both in the mix. But none of these exosome-based drugs have proven themselves in human trials.

Codiak has been the field’s most high-profile effort, raising $168.2 million in venture funding since its inception in 2015 from Flagship Pioneering, Arch Venture Partners, Fidelity Management and Research, and others. Codiak initially aimed to develop both drugs and diagnostics before focusing exclusively on therapeutics. The company intends to treat a range of diseases—cancer, immune-based diseases, neurodegenerative disorders, and more.

Its first attempts are two cancer therapies known as exoSTING and exoIL-12. ExoSTING, being developed for solid tumors, activates the “STING” receptor in immune cells, which is thought to potentially help treat cancer. Codiak is developing the treatment for solid tumors that either resist or likely won’t respond to immunotherapy. ExoIL-12, meanwhile, is meant to stimulate two types of immune cells—T cells and NK cells—to attack cancer. Codiak believes both programs may overcome limitations seen with other approaches. In preclinical tests, neither provoked the “potentially toxic” immune response seen with other methods, Codiak said. Human studies of both therapies are slated to begin in 2020.

The company has a deal in place with Jazz Pharmaceuticals (NASDAQ: JAZZ) to develop up to five exosome-based drugs. In January, Codiak got $56 million up front from Jazz.

Arch holds 28.38 percent of Codiak, followed by Flagship (18.97 percent) and Fidelity (14.17 percent), according to the IPO prospectus.

Codiak is the fifth biotech to file for an IPO just this past week, joining South San Francisco, CA-based Ideaya Biosciences, Dallas-based Peloton Therapeutics, UK-based Bicycle Therapeutics, and Karuna Therapeutics, of Boston.

Here’s more on Codiak and exosome technology.