San Diego’s Avalon Ventures is taking the wraps off two new startups today, with each one getting as much as $10 million in Series A financing through the partnership that Avalon established early last year with GlaxoSmithKline (NYSE: GSK).
Silarus Therapeutics is targeting a recently discovered hormone, erythroferrone, for treating disorders involving iron regulation in red blood cell production.
Thyritope Biosciences is developing therapeutics for Graves’ disease, an autoimmune disorder caused by antibodies that over-stimulate the thyroid and cause excessive thyroid hormone production.
Both companies have taken residence at COI Pharmaceuticals, the independent “community of innovation” Avalon established in San Diego with a fully equipped R&D facility to provide operational support and other services for the life sciences startups in Avalon’s portfolio.
Avalon and GSK formed a “first-of-its-kind collaboration” in April 2013, agreeing to provide as much as $495 million (GSK agreed to bankroll as much as $465 million and Avalon put up $30 million) to start 10 new life sciences companies within three years or so.
The collaboration is intended to combine the resources and R&D expertise of GSK, the multinational pharmaceutical, biologics, vaccines, and consumer healthcare giant, with Avalon’s prescience in picking life sciences innovations and successful performance in managing early stage portfolio companies. (Under their collaboration, Avalon provides the executive leadership and operational management for each startup.) Combining Avalon’s nimble startup mentality with GSK’s scale “is really the core of the whole idea,” says Jay Lichter, the managing director at Avalon who worked out details of the GSK deal. He says their collaboration represents “a new model for driving early stage drug discovery.”
The first startup to come out of the Avalon-GSK partnership, Sitari Pharmaceuticals, was launched in November to develop new treatments for celiac disease. Shortly after that, GSK established a satellite office in San Diego, headed by Damien McDevitt, to help manage its relationships with Avalon and other VC firms, and to prospect along the West Coast.
With a total of three companies launched in 17 months, the Avalon-GSK collaboration might seem to be a little behind schedule for starting 10 companies in three years. But Lichter says, “We’re just about where we want to be,” with more deals in the works.
“From conception of the idea to three companies in less than 18 months is an unprecedented pace for us,” says Lon Cardon, GSK’s senior vice president for alternative discovery and development, says in the joint statement released today. “We are achieving our goal of capitalizing on exciting science and at the same time increasing efficiency in drug discovery, which ultimately will benefit patients.”
Asked if there is a trend among the companies started so far, Lichter said auto-antibodies represent “a really interesting and understudied area” and new research tools are opening some fresh opportunities in drug development.
Graves’ disease, for example, is an autoimmune disorder caused by antibodies that over-stimulate the thyroid, causing excessive thyroid hormone production. The same antibodies stimulate tissue around they eyes, causing a bulging of the eyes known as Graves’ orbitopathy.
While there are existing treatments to manage Graves’ hyperthyroidism, these treatments don’t address the underlying cause of the disease. Thyritope is developing drugs that target these thyroid-stimulating auto-antibodies, which Lichter said is one of the few cases in which auto-antibodies are also an agonist that binds to a receptor to produce a biological response. The epitope, the specific part of the antigen that these antibodies bind to, “is likely to be extremely small and conserved,” Lichter said.
Thyritope was founded on so-called “molecular evolution” technology developed by Patrick Daugherty, a professor of chemical engineering and biomolecular science and engineering at UC Santa Barbara, and commercialized by Serimmune.
Silarlus Therapeutics was founded with technology licensed from UCLA that was discovered by Tomas Ganz and Elizabeta Nemeth of the UCLA David Geffen School of Medicine. The startup is developing drugs targeting erythroferrone for the treatment of iron deficiency, also known as anemia, as well as iron overload, in which a build-up of excess iron causes organ toxicity or failure.
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