Aardvark said to be planning IPO, plus other bio financings

Our regular round-up of financings in the biotech sector is headed by rumours of a $150 to $200 million initial public offering (IPO) for Aardvark Therapeutics, an emerging player in the weight-loss category, alongside a trio of big private rounds.

San Diego, California-based Aardvark is gearing up for the IPO sometime this summer, according to a report in the Financial Times citing people familiar with the matter. The company’s lead drug, ARD-101, is a small-molecule TAS2R pan-agonist in clinical testing for obesity, as an adjunct to weight-loss surgery, and for Prader-Willi syndrome (PWS).

The company’s approach is generating excitement among investors because it works differently to the barrage of GLP-1 agonist-based therapies on or near the market, and could be less prone to their side effects, like nausea loss of lean muscle mass, said the FT. It is in phase 2 testing, with PWS, a rare genetic form of obesity, the lead indication with a possible launch date pencilled in for 2026 if all goes well.

Also in Aardvark’s clinical pipeline is an early-stage candidate for autism spectrum disorder (ASD), called ARD-501, and a drug for fibromyalgia partnered with Scilex Pharma.

Obsidian Therapeutics, a specialist in tumour-infiltrating lymphocyte (TIL) cell therapies, has raised $160.5 million in a third-round financing round that will be used to fund its clinical programmes and scale up manufacturing capacity.

Lead programme OBX-115, based on a TIL that has been genetically modified to produce a cell membrane-bound form of the cytokine IL-15, doing away with the need to co-administer IL-2, which can cause serious side effects. The therapy is in a phase 1 trial in advanced or metastatic melanoma and phase 1/2 for advanced or metastatic solid tumours including non-small cell lung cancer (NSCLC).

The Series C was led by Wellington Management, with Novo Holdings taking part along with Foresite Capital, Janus Henderson Investors, Paradigm BioCapital, RTW Investments, T. Rowe Price and Woodline Partners. Previous backers of the company include Bristol-Myers Squibb.

Cancer-focused biotech Alterome has completed a $132 million Series B led by Goldman Sachs Alternatives and backed by Canaan Partners, Driehaus Capital Management, Invus, Digitalis Ventures, Blue Owl Capital, and existing investors.

The money will be deployed to advance multiple programmes through development, including two precision oncology candidates that will start clinical trials within the next 12 months, said the San Diego, California company, which uses a structure-guided machine learning and computational chemistry platform called Kraken to generate drug candidates.

Its lead candidates are an AKT1 E17K inhibitor and a KRAS selective inhibitor, targeting two well-established cancer-causing mutations, with a pair of programmes targeting the MAPK pathway further back in preclinical development. Alterome has raised $232 million to date, completing a $99 million first round in 2022.

Finally, Diagonal Therapeutics has raised $128 million from first-round financing, co-led by BVF Partners and Atlas Venture, that will support the development of its agonist antibody candidates for the treatment of rare diseases.

The new funding should be enough to take Diagonal’s lead candidate through proof-of-concept clinical testing, said the Cambridge, Massachusetts start-up. The drug is an agonist of a receptor complex in the TGF-β superfamily that is impaired in patients with hereditary haemorrhagic telangiectasia (HHT), a genetic disorder that leads to the formation of abnormal blood vessels. Also in its pipeline are an IL-18 agonist for solid tumours and another agonist antibody for pulmonary arterial hypertension.

Lightspeed Venture Partners, RA Capital Management, Frazier Life Sciences, Viking Global Investors, Velocity Capital, and Checkpoint Capital also participated in the round.