Flagship seeks $500M for sixth fund; unveils another microbiome firm

New start-up Kaleido is headed by ex-Cubist CEO Mike Bonney

Cambridge, MA-based venture capital group Flagship Pioneering has filed a $500 million offering with the Securities & Exchange Commission to set up a sixth investment fund.

The VC, which was founded in 2000 and has around 30 investments across the biotech, healthcare and IT sectors, has $1.75 billion in play—so the new fund represents a sizable increase.

It's last offering—dubbed 'special opportunities'—raised $285 million and closed in December 2016, coinciding with a name change from Flagship Ventures, complementing its fifth fund, which raised $585 million in 2015 and remains its largest to date. The VC's portfolio includes companies like Agios, Editas, Syros Pharma, Moderna and Rubius Therapeutics.

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Report of the new fund offering came in an SEC filing, just before Flagship unveiled its latest startup—human microbiome specialist Kaleido Biosciences—which emerged from stealth mode after being set up in 2015 under the leadership of ex-Cubist Pharma CEO Mike Bonney (pictured).

Interacting with the microbiome, an ecosystem of trillions of microbes that live in the body, to find ways to impact human health is an emerging approach for the biopharma industry and a recurrent investment draw for Flagship, which has been active in the area since 2007.

Kaleido is the third microbiome specialist with a focus on human health to be backed by Flagship after Seres Therapeutics and Evelo Therapeutics—or the fourth if you count Epiva Therapeutics, which merged with Evelo last year—and its portfolio also includes agri-biotech firm Indigo Agriculture.

The new player has raised $65 million in funding since its inception and has directed that funding toward a platform that uses synthetic chemistry to design novel compounds to boost specific elements of the microbiome. So far, microbiome companies have tended to focus on infectious disease and cancer, but Kaleido reckons its platform could have broad potential "across major therapeutic areas and organ systems."

Details on its pipeline are sketchy right now, but its most advanced project, said to be in the area of rare genetic disorders, has reached the early clinical stage, while other programs are focused on oncology and infectious disease.

"Since its origination … Kaleido has grown into a team of more than 60 people and made impressive strides in pioneering the first drug chemistries to enhance and stimulate the many functions of the human microbiome," said Noubar Afeyan, Ph.D., founder, senior managing partner and CEO of Flagship.

"These chemistries will fundamentally change the way we approach the microbiome as a druggable target in the body and redefine the way we treat and prevent serious illnesses related to the microbiome."