After beefy funding rounds, exosome-focused Codiak guns for $86M IPO

It’s had big names join its ranks and big backing from VCs; now, early-stage exosome biotech Codiak BioSciences wants in on the public market.  

Cambridge, Massachusetts-based Codiak (not to be confused with Kodiak Sciences) emerged in 2015 boasting a leadership team headed by ex-Biogen R&D chief Doug Williams and $31 million in venture funding.

A $61 million series B followed just months later as Arch Venture Partners, Flagship Ventures and other investors comfortable placing big bets on biotech piled in.

Then, in 2017, a series C raised $76.5 million, moving Codiak’s total haul up toward $170 million, teeing the exosome-focused biotech up to move its lead candidate into clinical trials.

Now, like almost every other biotech it seems, it wants an IPO, filing with the SEC for $86 million on the Nasdaq exchange under the ticker "CDAK."

While the timelines for clinical work have shifted somewhat since the series A four years ago, Codiak’s scientific focus has held steady. The biotech was founded on the back of research that expanded understanding of the role of exosomes beyond cellular trash removal.

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That led to the recognition it may be possible to hustle nucleic acids and other macromolecules into cells hidden inside exosomes, thereby bypassing the mechanism the body uses to repel invaders.

Exosomes are naturally occurring, nanometer-sized vesicles that are released and received by nearly all cells in the body, and serve as an efficient system of intercellular communication. 

In the tumor microenvironment, exosomes have been shown to carry molecular messages between tumor and immune cells. Codiak has co-opted this process and, through its engEx platform, engineers drug molecules into the exosome to create therapeutic candidates, which have shown preclinical antitumor activity.

Back in the summer of 2017, an MD Anderson Cancer Center team including Raghu Kalluri, M.D., Ph.D., who was an early collaborator with Codiak, showed uptake of RNAi-laden exosomes by pancreatic tumors in mice.

That raised hopes the approach can drug KRAS, a hard-to-hit location of oncogenic mutations. But it left the question of whether the payload suffers lysosome-dependent degradation unanswered. Using its funding round and its potential IPO haul, Codiak will now need to answer those questions with clinical data.

In its SEC-1, the biotech said of its timeline: “We are focused initially on targeting immune cells with our first product candidates generated from our engEx Platform, or engEx product candidates, which are currently in preclinical development. We plan to advance our first two engEx product candidates, exoSTING and exoIL-12, into clinical development in 2020.”

The biotech added that it was initially focusing development efforts on targeting immune cells including antigen presenting cells, T cells, natural killer cells, monocytes and macrophages and B lymphocytes, or B cells.

“This initial focus potentially allows us to develop engEx product candidates across various therapeutic indications due to the crucial role that immune cells play in many human diseases and in many therapeutic areas,” the company said in its filing.

Codiak also got a boost this year when it penned an R&D deal with Jazz Pharmaceuticals, seeing it get $56 million upfront with up to $200 million in biobucks for five targets, additional preclinical development milestones of up to $20 million, a co-commercialization option on two products and royalties on future net sales coming out of its platform.

A number of other biotech are also working on exomes, including Evox Therapeutics, which raised £35.5 million ($45.4 million) in a series B last fall and has a deal with Germany’s Boehringer Ingelheim, and the liquid biopsy player Exosome Diagnostics, which was bought out by Bio-Techne last summer.