UPDATED: Aragon begets Seragon as VCs bankroll $30M cancer drug spinoff

Richard Heyman, CEO of Aragon Pharmaceuticals

Now that Johnson & Johnson ($JNJ) has wrapped up the $1 billion acquisition of Aragon and its next-gen treatment for castration-resistant prostate cancer, the biotech's founders can devote themselves to a new startup that now has a $30 million venture bankroll to work with.

CEO Rich Heyman and his team have launched Seragon, the son of Aragon which is developing ARN-810 for breast cancer. And he has some familiar faces in the venture team backing him, with venBio, Topspin Fund, Aisling Capital, OrbiMed Advisors and The Column Group stepping up to contribute to the Series A.

The biotech has set out to build a pipeline of selective estrogen receptor degraders for various cancers. J&J cherry-picked ARN-509 for CRPC in its deal, cleanly scooping up complete control of the program and leaving the team to spin out a new company with the rest of the assets. ARN-810 had already begun a Phase I study at the time of the buyout.

ARN-509 attracted a significant amount of buzz early on. The treatment was discovered by a team of scientists led by Charles Sawyer, a Howard Hughes Medical Institute investigator who is credited with the discovery of the recently approved Xtandi, another prostate cancer treatment that was heralded as a potential game changer at Medivation ($MDVN). Sawyer sometimes referred to ARN-509 as the "Son of Medivation," and a number of observers have indicated that it could have a blockbuster future if it can survive the clinical trial process.

Seragon launches with a team of 22 staffers, all legacy hires with one exception, says Trisha Millican, the former finance chief at Aragon who made the jump to the spinoff. That's a good size for the company for the next year or so, she adds, noting that Sawyer will also stay on as a scientific adviser to the company. Millican also adds that a Phase II study for 810--originally developed in an in-house program--could get underway in late 2014, with plans for an IND on one of their preclinical programs making progress.

Don't look for any deals in the near-term, Millican tells FierceBiotech.

"We plan to keep this in-house for awhile," says Millican, "until we see additional progress, meaningful success. And that's what this team is really good at."

- here's the press release

Special Report: 2012 Fierce 15 - Aragon Pharmaceuticals

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