VLST CEO Marty Simonetti likes to joke that his company’s name stands for “very large secret technology.” It’s only half in jest, because VLST hasn’t said much publicly about its progress the past couple years.
But the Seattle biotech company has made enough progress to raise another $5 million in venture capital in a deal that could be worth as much as $15 million over time, according to a filing today with the Securities and Exchange Commission.
VLST (which actually stands for Viral Logic Systems Technology) was started at Accelerator in May 2004, and became one of the biotech incubator’s high-profile “graduate” companies when it announced a Series B financing in 2006 that was worth $55 million in installments. That financing came from TPG Ventures, MPM Capital, Arch Venture Partners, OVP Venture Partners, Amgen Ventures, MedImmune Ventures, and WRF Capital.
The latest deal, which represents an extension of the Series B, is coming from Arch, OVP, WRF, and Versant Ventures, Simonetti says. VLST has now raised a total of about $50 million since its founding, because it hasn’t collected the full amount of the Series B that was announced in 2006, Simonetti says.
The new money will be used to help VLST keep moving forward with its R&D programs, and potentially to in-license another drug candidate for development, Simonetti says.
“We are continuing to advance our internal programs, and like everybody else we have been scouring the environment to look for any potential, relevant in-licensing opportunities,” Simonetti says. “We wanted to make sure we had the necessary capital to do both if we needed.”
VLST, founded by former Immunex scientists Craig Smith and Steve Wiley, has spent its time and money gathering insights about the immune system in hopes of applying them toward new drugs for autoimmune disease. The company specifically studies proteins that viruses secrete to fend off an attack from the body’s natural immune defenses. The concept, as Simonetti explained in a 2008 interview, is to study these proteins, and the targets they hit on cells, to discover new targets for drugs that can tamp down overactive immune reactions. Autoimmunity, an umbrella term for conditions in which the immune system goes haywire and attacks healthy tissue, is a massive area of pharmaceutical industry interest. Such immune system disorders underpins chronic diseases like rheumatoid arthritis, multiple sclerosis, psoriasis, Type 1 diabetes, lupus and more—diseases which affect tens of millions of people around the world.
VLST got some validation for its approach in December 2008 when Danish drugmaker Novo Nordisk agreed to a collaboration that pumped $12 million into the small biotech. That partnership is now coming to an end at the end of June, Simonetti says, after his company met its goals of helping provide a “jump-start” to Novo’s inflammation research efforts in Seattle. VLST also struck a second partnership in 2010 with Japan-based Takeda Pharmaceuticals, which recently ended after a two-year term, Simonetti says. VLST currently has another partnership with Belgium-based UCB to help discover drug targets.
VLST has had success with these early drug-discovery partnerships, and will consider doing more of them as long as other companies are interested, Simonetti says. But in parallel, VLST also intends to develop its own drugs. The company’s most developed molecule at the moment is an antibody drug called AntiKine. This drug candidate is thought to have potential against a variety of autoimmune disease because of its ability to hit multiple beta-chemokine targets, Simonetti says. The drug hasn’t yet advanced to clinical trials.