Ann Arbor biotech upstart grabs $62M round and a PhII drug from AstraZeneca

Millendo CEO Julia Owens

Three years after Ann Arbor, MI-based Atterocor got started with a lead program for adrenal cancer, the biotech is now ready to launch into its next big stage of development after in-licensing a mid-stage drug from AstraZeneca ($AZN) and raising a whopping $62 million round with plans to roll out a slate of new studies. And the developer will be operating under a new and more easily handled name: Millendo Therapeutics.

Millendo lined up rights to AZD4901 for polycystic ovary syndrome (PCOS), the most common endocrine disease in women. 

AstraZeneca had tried, and failed, on this therapy for schizophrenia. Then the pharma giant handed it over to a salvage team tasked with finding value in old flops, and they tested multiple doses in 65 women suffering from PCOS, intrigued by the potential of NK3-receptor drugs. 

The team believe they found a promising new target for the drug, but AstraZeneca is carefully focused on three key arenas, and this therapy didn't fit the R&D plan. In those cases, AstraZeneca likes to partner what it won't advance on its own.

Millendo attracted a big round from investors willing to buy in on the biotech's plan to establish clinical proof-of-concept data on four indications over the next two and a half years.

The AstraZeneca drug "already has Phase IIa data," says Millendo CEO Julia Owens, who's planning a Phase IIb for later in the new year. And their lead drug--ATR-101 for rare cases of adrenocortical carcinoma, which develops as cancer cells cluster in the outer layer of the adrenal glands--is also going into Phase II.

A well-funded New Enterprise Associates led the round, with new investors Roche Venture Fund, Adams Street Partners, Altitude Life Science Ventures, Longwood Fund and Renaissance Venture Capital Fund jumping in. The current investors--Frazier Healthcare Partners, Osage University Partners, 5AM Ventures, and the Regents of the University of Michigan--also joined the round. And it was Frazier that introduced Millendo to the AstraZeneca program, seeing some good synergies with its lead drug.

As part of the step up in financing, biotech vet Carol Gallagher is switching from an independent board seat to a new role representing NEA, while Tracy Saxton of the Roche Venture Fund is also joining the board. 

Owens is also beefing up the staff to meet its broader development strategy. Currently the biotech has 13 employees, and Owens expects that to swell to about 20 by year's end.

- here's the release

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