Eleven adds $20M in venture cash as it preps for the clinic

Posted under Blog, Companies, Diagnostics, EBI-005, Eleven Biotherapeutics, Emerging Markets, Flagship Ventures, Funding, Medical Devices, Medical Supply, Pharmaceuticals, Pipeline, Startups, Third Rock Ventures, Universities, Videos by john

Eleven Biotherapeutics has topped up its bank account with a $20 million injection of venture cash as it readies its first protein therapeutic for the clinic. Third Rock Ventures and Flagship Ventures have chipped in their final $10 million tranche to the Series A, while Japan's JAFCO has joined the venture team and added $10 million of their own, bringing the total A round to $45 million.

Yesterday Eleven, a 2010 Fierce 15 company, unveiled a look at the company's lead treatment, EBI-005, a preclinical topical protein therapy for dry eye syndrome. The biotech got started a couple of years ago after the founding venture groups brought some of the top minds in protein engineering to the table. They've been engineering the first protein therapy for ophthalmology--an IL-1 receptor inhibitor--that can be delivered with an eye dropper. And the developer plans to follow up with another ophthalmology candidate that will trail the lead program by about 12 months.

Getting JAFCO to join the venture group made a lot of sense strategically, says CEO Abbie Celniker. Japan has the second largest ophthalmology market in the world, and it makes a lot of sense to align the company more closely in a region where Japanese pharma companies have been keeping a keen eye on new therapies like the ones Eleven is bringing up the pipeline. 

Adding venture cash also marks an "evolution" of the company's original business strategy. Third Rock's Mark Levin had initially expected to hold the line at the original $35 million mark, expecting early-stage partnership dollars to fund the rest of the work. Adding JAFCO's contribution allows Eleven to bring its lead therapy up to the proof-of-concept phase. After the Phase I, which is slated to get under way before the end of the year, Eleven can design further trials, including a pivotal study. 

"We made the decision to take this to a bigger inflection point," says Celniker. "We're developing that molecule ourselves" and then regional partners can step in with non-dilutive funding. Celniker has also been keeping an eye on the M&A side of the industry. 

"It's sort of heated up over just the last quarter," says Celniker. In this ecosystem, biotechs are stepping up as the industry's innovation engine as Big Pharma continues to restructure R&D and pipelines. "I think we're going to see it heat up a little more," she adds. And if the trend continues, it might present interesting options for companies like Eleven.

- read the press release on the venture cash
- here's the release on EBI-005

Special Report: Eleven Biotherapeutics - 2010 Fierce 15

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Merck, Flagship join forces on fostering biotech startups

Posted under Blog, Companies, Diagnostics, Flagship Ventures, Funding, Medical Devices, Medical Supply, Merck Research Laboratories, Merck Research Ventures Fund, Partnering, Pharmaceuticals, Startups, Universities, Videos by john

Fresh from raising $270 million for its new biotech fund, Flagship Ventures is teaming up with a pair of key Merck outfits--Merck Research Laboratories and its newly formed Merck Research Ventures Fund--to collaborate on fostering a string of innovative new drug developers. 

In what's being billed as a marriage of early-stage investment savvy with Big Pharma expertise on development and commercialization, Flagship is looking at this as a new twist on a major new theme in the startup sphere. In this case, Merck ($MRK) gets a seat at the table of new biotech companies that promise to launch important new treatments. And Flagship, which has its own incubator and a Rolodex full of top researchers with an entrepreneurial bent, gets a big player to step up and lend a hand when it can provide essential support.

"This is a pretty novel way for a large pharma company to draw closer to early stage" efforts, Noubar Afeyan, the managing director and chief executive officer of Flagship, tells FierceBiotech this morning. Merck had already invested in Flagship's new fund, announced in January. 

The goal here, though, isn't to line Merck up with a financial stake in these early-stage companies, says Afeyan. He sees it more in line with the open innovation movement, with Merck "going way upstream" and contributing expertise to fledgling startups so it can "gain access and provide influence into what's coming next long before it's taken the shape of an asset they may want to do a deal with."

While not a copy, the collaboration bears some resemblance to Index Venture's new fund, which included investments from Johnson & Johnson ($JNJ) and GlaxoSmithKline ($GSK) and plans to back early-stage biotechs in Europe and the U.S.

"The collaboration with Flagship underscores Merck's commitment to fully engage with the entrepreneurial ecosystem at the earliest possible stages and to access breakthrough science for the development of novel therapeutics," said Roger Pomerantz, senior vice president worldwide licensing and knowledge management at Merck.

- here's the press release

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Early-stage biotech investor Flagship launches $270M fund

Posted under Biotech Venture Capital, Blog, Companies, Diagnostics, Flagship Ventures, Funding, Medical Devices, Medical Supply, Pharmaceuticals, Startups, Universities, Venture Capital fund, Videos by John Carroll

Flagship Ventures is expected to announce that it has reeled in $270 million for its new life sciences funds, putting it on track to launch a bevy of new biotechs to join its lengthy roster of startups. A key player in the early-stage R&D investment arena, Flagship managing partner and CEO Noubar Afeyan says Fund IV easily broke its $250 million goal.

The money will add around 20 new companies to Flagship's portfolio which will stand to gain anywhere from $10 million to $20 million in support from the venture group, Afeyan tells FierceBiotech at the J.P. Morgan conference in San Francisco. About eight of those companies--which will include a slate of sustainability tech companies in the mix with life sciences--will be founded in the firm's VentureLabs. And there's some money that's going to be earmarked for relatively late-stage efforts, he adds, to take advantage of the constricted financing environment that afflicts the industry.

"It is a tougher environment," says Afeyan. "The investment community that invests in our funds are markedly discouraged or pulling back." That said, Afeyan also notes that Flagship turned away $30 million before it closed the fund. And combined with the $200 million in healthcare cash Canaan unveiled for its new fund on Monday, the industry will end the week with a fresh pot of $470 million to compete for. 

Flagship is well known to many of the biotech industry's highest profile entrepreneurs, particularly the risk-takers in the academic community working on cutting-edge approaches to medicine. The fund has backed three creations from MIT's Robert Langer and Harvard's Omid Farokhza--Selecta Biosciences, Bind Biosciences and the newly launched Blend Therapeutics. It's also done well with startups like Agios Pharmaceuticals ($33 million Series A) and Adnexus Therapeutics (acquired by Bristol-Myers Squibb), with bets on ModeRNA (another Langer company) and more now in the works. All of them share two common traits, says Afeyan: A new approach to a mechanism of action or a platform that can deliver multiple drug products.

There's something else that all 35 companies in the portfolio share, he adds. None of them have done an option deal. And if he has his way, that record will remain unchanged for this new batch of companies coming under his wing.

- here's the Flagship release