Lilly, Pfizer-backed Arkuda bags $64M to test drug in frontotemporal dementia in 2023

Arkuda Therapeutics, already backed by Pfizer and Atlas Venture, has added Eli Lilly and other venture shops in a $64 million series B to bankroll an entry into the clinic in late 2023. 

The Watertown, Massachusetts biotech wants to use small molecules to modulate progranulin, a protein that plays a key role in the function of the lysosome, a part of the cell that digests and degrades sugars, proteins and other molecules. Progranulin is crucial to helping the lysosome's 60-plus enzymes break down those molecules. 

“Lysosomal dysfunction is a core feature, or hallmark you could say, for many neurodegenerative diseases such as Alzheimer’s, Parkinson’s, frontotemporal dementia," said Gerhard Koenig, Ph.D., CEO and cofounder of Arkuda, in an interview. 

That last one, FTD, is Arkuda's core focus right now. The biotech will perform studies throughout next year to gear up for a late-2023 clinical entry to test an initial program in patients with GRN-related FTD, said Chief Business Officer Andy Hu, M.D., in the joint interview. People with that inherited form of dementia have a faulty copy of the GRN gene and have low progranulin levels. 

RELATED: Arkuda bags $44M to target progranulin and head off inherited dementia

Arkuda had previously eyed 2021 for a clinical entry, Hu told Fierce Biotech at the time of the startup's $44 million series A in November 2019. But the biotech has focused on increasing the potency of its small molecule "more than a thousand-fold" and improving the compound's penetration capabilities, Koenig said. 

After getting into FTD, Arkuda will explore the potential of testing its drugs in patients with Alzheimer's, Parkinson's and other diseases, Koenig said. The Michael J. Fox Foundation granted funding to Arkuda in December 2021 for preclinical studies in Parkinson's.

The startup can look to its new investor Lilly for a blueprint in neurodegenerative drug development. The Indianapolis Big Pharma is on the tail of Biogen, hoping to get its Alzheimer's treatment donanemab approved soon. But those hopes have been delayed as Lilly is pushing its submission beyond this quarter. Lilly also has gene therapies in mid-stage testing for Parkinson's, FTD and Gaucher disease.

RELATED: Vanqua Bio snags $85M series B to vanquish Parkinson's, Gaucher, ALS and Alzheimer's

To supplement its pipeline expansion and push toward the clinic, Arkuda will add about 10 employees in the next year and a half, Koenig said. The company promoted Serena Hung, M.D., to chief medical officer last year. She joined in 2020 as head of clinical development after director roles at Wave Life Sciences and Biogen. 

External programs could also be brought in with the fresh proceeds, Hu said. "But I would say we're still early days on that," the executive said. 

The lysosome, or the cell's recycling unit, is core to the work of another neurodegenerative-focused biotech, Vanqua Bio. The Chicago biotech secured an $85 million series B, also partially from Lilly, to help restore functionality in the lysosome so it can "do its thing," CEO Jim Sullivan, Ph.D., told Fierce Biotech at the time of the September financing.