Rgenix, a biotech spun out of New York’s Rockefeller University by three brothers, has reeled in a $33 million Series B financing as it preps its top drug candidate, a cancer immunotherapy agent, to enter clinical trials.
The drug, known as RGX-104, was once shelved at GlaxoSmithKline (NYSE: GSK) because of side effects. But Rgenix’s underlying technology pointed the company toward the drug and others like it, because they hit a molecular target that might stimulate the immune system to attack cancer.
Hitting that target, the liver X receptor (LXR), also seemed to be the cause of side effects that forced the halt of LXR-targeting drugs at GSK and elsewhere. But University of Houston scientist and LXR expert Chin-Yo Lin, who is not affiliated with Rgenix, told Xconomy last year that a Rgenix paper published in the journal Cell in 2014 was the best work he had seen to date in “establishing LXR as a cancer target.”
The question is whether Rgenix, with RGX-104, has found the right compound to trigger LXR, and thus a cancer-fighting immune response, without causing dangerous side effects. No LXR-activating drug has made it past Phase 1.
A Phase 1 study will start in the second half of 2016, said CEO Masoud Tavazoie, who started Rgenix with his brothers Sohail, a Rockefeller professor and oncologist at Memorial Sloan-Kettering Cancer Center, and Saeed, a Columbia University professor. Masoud Tavazoie declined to give the number of patients or expected completion date.
The study will test RGX-104 in several cancer types both as a standalone agent and in combination with a checkpoint inhibitor—a type of cancer immunotherapy that blocks signals that tumors use to evade the immune system. Four checkpoint inhibitors have been approved by the FDA to fight types of lung, skin, kidney, and most recently, bladder cancer.
But even for the cancers they’re approved to treat, checkpoint inhibitors don’t work for a majority of patients. Dozens of companies are racing to test immunotherapy combinations, with tiny firms like Rgenix holding out their drugs as possible companions to boost the success rate of checkpoint therapy.
Rgenix is running a bit behind schedule. Last year, the company was aiming to start the trial in early 2016, as Xconomy reported. When asked about the delay, Tavazoie would only repeat that the trial will begin in the second half of the year.
A $33 million Series B round is a common occurrence in flourishing biotech hubs like Boston and the San Francisco Bay Area. But it’s rare in New York, where a lack of wet lab space and other problems have made it harder for the area to capitalize on its wealth of research institutions. The round gives Rgenix the second-largest financing for a Manhattan biotech this year, trailing only the $48 million raised by Petra Pharma in January, a testament to the city’s dearth of startups relative to other regions.
A recent influx of venture investors have brought momentum to the city recently. In December, Lux Capital teamed with investors in Boston and San Francisco to form Kallyope, a Columbia spinout, and Versant Ventures seeded another Columbia startup, Kyras Therapeutics. Accelerator started Petra and Lodo Therapeutics in January.
More lab space will soon become available as well: Alexandria Real Estate Equities plans to raise a $10 million to $25 million seed fund and open a 15,000 square foot incubator next year on the East Side of Manhattan, adding to incubators already running in Brooklyn and West Harlem. Rgenix’s financing represents another step forward for the city’s life sciences scene.
Novo A/S and Sofinnova Partners led the Series B round, and their respective representatives will join the Rgenix board of directors, joining Eric Rowinsky, a former ImClone Systems chief medical officer; Nancy Chang, who founded and ran Tanox before selling it to Genentech in 2007; and Masoud and Saeed Tavazoie.
—Ben Fidler contributed to this report