Parabilis scores $305m in bumper biofinancing week

January has started with a bang for private biotech financings, with this week's haul including an impressive $305 million Series F for Parabilis Medicines.

The Cambridge, Massachusetts-based company – known as FogPharma until a rebrand in 2024 – needs cash for pivotal trials of zolucatetide (FOG-001), a beta-catenin inhibitor, in desmoid tumours. The new funding will also allow it to bring other candidates in its polypeptide drug pipeline into clinical testing.

Desmoid tumours are a form of benign, but locally aggressive, growth that affects soft tissues. They do not spread to other parts of the body like cancer, but can be debilitating, and – in rare cases, when vital structures are impacted – even life-threatening. Until the approval in 2023 of Merck/SpringWorks' oral gamma secretase inhibitor Ogsiveo (nirogacestat), there were no therapies specifically approved to treat these tumours.

Beta-catenin, an intracellular signalling protein in the Wnt/Wingless pathway activated in around a fifth of all cancers, has been a compelling intracellular target for cancer drug developers, but has proved hard to crack and, for many years, was considered "undruggable." Parabilis has designed an alpha-helical polypeptide or 'miniprotein' that is taken up into cells and can directly target the protein.

In a phase 1/2 trial reported last year, zolucatetide showed activity as a monotherapy in various forms of desmoid tumour, as well as adamantinomatous craniopharyngioma, a rare brain tumour that is also driven by the Wnt/beta-catenin signalling pathway, earning the drug fast-track status from the FDA. Additional data in liver cancer is due to be presented at the JP Morgan Healthcare Conference next week.

The Series F comes a couple of years after a $145 million Series E under the FogPharma banner, and is led by RA Capital Management, Fidelity Management & Research, and Janus Henderson Investors. It also sees the return of a host of investors, including venBio Partners, Cormorant Asset Management, and Arch Venture Partners, alongside new backers Frazier Life and Soleus Capital.

Five other $100m+ rounds this week

In any other week, Soley Therapeutics' $200 million third-round would have taken the top slot in our round-up. Still, it's a big raise and further evidence for the interest in biotechs focusing on the application of AI to drug discovery, even if their pipelines are still at the preclinical stage.

South San Francisco-based Soley will use the proceeds to take two lead cancer candidates – one for acute myeloid leukaemia (AML) and the other for solid tumours – into clinical testing within the next year or so. Its platform utilises computer vision and AI to detect and analyse stress responses when human cells in both healthy and diseased states are exposed to drugs.

New investors in this round included Surveyor Capital as the primary backer, joined by HRTG Partners, RWN Management, and others. Existing supporters Doug Leone Family Fund, Breyer Capital, and GordonMD Global Investments also participated.

Alveus Therapeutics raised $160 million in its first-round financing, which is quite a feat for a biotech start-up emerging onto the scene, but a reflection of the high valuations attached to obesity drug candidates.

Led by former I-Mab chief executive Raj Kanna, US- and Denmark-based Alveus will use the proceeds for phase 2 trials of ALV-100, a bifunctional fusion protein that combines GIP antagonism with GLP-1 agonism and is designed to provide effective weight loss with greater tolerability than existing therapies. It also has an amylin agonist (ALV-200) in preclinical development along with other small-molecule therapies.

The Series A was led by New Rhein Healthcare Investors, Andera Partners, and Omega Funds, with participation by Sanofi, Kurma Partners, Avego BioScience Capital, and other unnamed entities.

Watertown, Massachusetts start-up Diagonal Therapeutics completed a $125 million Series B – co-led by Sanofi Ventures and Janus Henderson Investors – that will help fund development of DIAG723, described as a first-in-class, disease-modifying therapy that could correct the root cause of hereditary haemorrhagic telangiectasia (HHT) and pulmonary arterial hypertension (PAH), two rare diseases that can be life-threatening.

The drug is an agonist antibody designed to address dysregulated ALK1 signalling in endothelial cells that is thought to underlie HHT and PAH, and is due to start clinical testing in the first half of this year. The new funding - which follows a $128 million debut in 2024 - will also be used for additional agonist antibody candidates with indications in haematology, hepatology, and nephrology.

Other participants in the round included Deep Track Capital, EcoR1 Capital, Logos Capital, Balyasny Asset Management, and Woodline Partners.

Protein degradation specialist EpiBiologics revved up its resources with a $107 million Series B, co-led by the venture capital units of Johnson & Johnson and Google and backed by a fleet of new investors, including Novartis Venture Fund, Aulis Capital, Avego BioScience Capital, and Samsara BioCapital.

The San Mateo, California biotech said it will use the proceeds to bring its lead candidate for EGFR-driven cancers, EPI-326, into human trials. The drug is a tissue-selective bispecific antibody designed to break down all cancer-related forms of EGFR, which means it could have broad efficacy whilst limiting the off-target side effects of current EGFR inhibitor drugs. Initial clinical trials will be carried out in non-small cell lung cancer (NSCLC) and squamous cell cancer of the head and neck (HNSCC).

In addition to Google's GV unit, existing investors Polaris Partners, Digitalis Ventures, Taiho Ventures, Vivo Capital, Codon Capital, and Mission BioCapital joined the round.

Finally, Rakuten Medical also claimed nine figures in new financing with a $100 million Series F led by TaiAx Life Science Fund that will fuel its mission to file for regulatory approval in the US of ASP-1929, a photoimmunotherapy for cancer, in 2028.

ASP-1929 is in the phase 3 ECLIPSE trial, comparing combination treatment with MSD's Keytruda (pembrolizumab) to Keytruda alone or Keytruda plus chemotherapy in previously untreated patients with recurrent HNSCC. The additional funding will be used to accelerate enrolment into the trial in the US, Taiwan, Japan, Ukraine, and Poland, according to the San Diego-headquartered biotech.

The round also featured Japanese financial institutions Daiwa Securities, Mitsui Sumitomo Insurance, Sumitomo Mitsui Banking, as well as Taiwanese venture firms ABIES Capital and Nexus CVC, pharma group Orient EuroPharma (OEP), and existing investors.

Image by Arek Socha from Pixabay