Generation Bio Pockets $110M for Next Wave of Gene Therapy, IPO Plans

Xconomy Boston — 

JP Morgan’s annual healthcare conference convenes in San Francisco this week and Generation Bio CEO Geoff McDonough is betting gene therapy will be among the discussion topics. While such therapies now offer ways to address some rare diseases that previously had no treatment, they also have limitations.

Generation Bio is among the new wave of companies trying to avoid or overcome the challenges facing the current slate of gene therapies. To support its efforts, the Cambridge, MA-based company has raised an additional $110 million for its most advanced programs while also aiming for something more.

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“It gets us to the clinic, although it’s almost certain we’ll take the company public ahead of that,” McDonough says.

The Series C financing includes crossover investors, firms that back both private and public companies and whose involvement is viewed as a sign a company is preparing to go public. T. Rowe Price led Generation Bio’s latest round, joined by Farallon, and Wellington Management Company. Also participating in the round were earlier investors Atlas Venture, Fidelity, Invus, Casdin, Deerfield, Foresite Capital, and an entity associated with SVB Leerink. The latest round comes two years after Generation Bio closed a $100 million Series B round.

Currently available gene therapies (and some that are still in development) use an engineered virus to deliver their genetic payloads. But the virus can be a problem. Some people have preexisting antibodies to adeno-associated virus (AAV), the virus used in many gene therapies. And if patients don’t already have those antibodies, they can develop them after being dosed with the treatment. That means patients can’t receive another dose if they need it, and so far, the durability of gene therapies is not yet known.

Generation Bio avoids viral delivery altogether. The company’s gene therapies use closed-ended DNA, or ceDNA, packaged inside a lipid nanoparticle. McDonough says it works just like AAV and it has the added advantage of being easier and less expensive to manufacture compared to AAV-based gene therapies. He adds that if patients need another dose, antibodies won’t be a problem. But the company still needs to show that in clinical trials.

Generation Bio’s most advanced programs are for the blood disorder hemophilia A and phenylketonuria (PKU), an inherited metabolic disorder. There are other companies developing gene therapies for both diseases. Pfizer (NYSE: PFE) has taken over development of SB-525, a hemophilia A gene therapy candidate initially developed by its partner, Sangamo Therapeutics (NASDAQ: SGMO). BioMarin Pharmaceutical (NASDAQ: BMRN) on Monday announced that US and UK regulators cleared the company to begin clinical testing of BMN 307, its experimental gene therapy for PKU. Both experimental treatments use AAV to deliver the therapies to cells.

Besides supporting its hemophilia A and PKU clinical research, McDonough says the new financing will enable his company to look at other rare metabolic disorders such as Wilson and Gaucher disease. He adds that the company will also explore how its technology can be used to deliver therapies to more tissues in the body, such as skeletal tissue and the retina. By being able to reach more tissues, the goal is to expand the scope of gene therapy beyond rare diseases and bring it to the masses, he explains.

McDonough says Generation Bio has been careful not to work with other companies because its technology was still in development. But now that the technology is more mature, the biotech will explore research alliances with larger pharmaceutical firms.

“I think we will do a partnership this year,” he says. “The question is in what domain and with which partner.”

Photo by Jeremy Bishop on Unsplash