Once considered impossible, Big Pharma has warmed up to the idea of drugging RNA over the last few years, inking platform deals with companies like Arrakis and Skyhawk. Now, Sanofi and Novartis are reaching a little deeper into their wallets for one of the earliest players in this arena.
Expansion Therapeutics unveiled an $80 million Series B round on Wednesday morning to bring its small molecule RNA platform one step closer to the clinic. Cormorant Asset Management led the round, while some big name backers like Novartis’ and Sanofi’s venture arms chipped in.
While a vast majority of drugs target proteins, Expansion is one of several companies targeting RNA — an approach that was considered impossible until recent science revealed that strands of RNA implicated in disease have clefts and crevices into which small-molecule drugs can bind.
The Boston-based biotech launched a few years ago, with roots tracing back to the lab of Scripps’ Matthew Disney (not related to the famous Disneys). The company in-licensed a couple more programs from Scripps this past May, including a tau program that’s been the focus of $3 million in grants over the last decade, and another undisclosed program.
“He’s probably the world’s key opinion leader in terms of modulating RNA molecules,” Expansion CEO Renato Skerlj said of Disney.
For now, Expansion is focusing on myotonic dystrophy type 1 (DM1), amyotrophic lateral sclerosis (ALS), frontotemporal dementia (FTD) and various tauopathies. Skerlj, who took over from former CEO Kevin Forrest last October, expects to announce candidates in 2024, once they’re ready for the clinic.
The chief executive says one of Expansion’s key differentiators is their laser focus on the neuro space. However, both Arrakis and Skyhawk have undisclosed neuro programs in the works, according to their websites.
And Expansion isn’t the only company that’s attracted some interest from Big Pharma. Last spring, Roche put down $190 million upfront and “billions” in biobucks to form an alliance with Arrakis, which emerged from stealth back in 2017. Merck doubled down on Skyhawk’s tech last May, offering $600 million per autoimmune and metabolic disease program. And in 2019, Vertex got behind Ribometrix’s RNA platform, offering $20 million upfront and more than $700 million in milestones.
In addition to Novartis and Sanofi, a slate of new and old investors participated in Expansion’s Series B, including Westlake Village BioPartners, Surveyor Capital, Logos Capital, RA Capital Management, 5AM Ventures and Kleiner Perkins.
When asked if a public debut is in Expansion’s future, Skerlj said not at least until they have some clinical safety data to work with.
“At that point, I think we would then think about bringing in crossover investors with an eye towards an IPO because we’ll have a sense of when we’ll have a clinical readout,” he said.
