Novartis, Sanofi-backed Expansion snags $80M for neurodegenerative RNA assets to rival Dyne, Locanabio

Expansion Therapeutics thinks its RNA-modulating science can lead to drugs that potentially treat all the symptoms of certain neurodegenerative diseases, and it's reeled in $80 million from Big Pharmas and venture firms alike. 

Sanofi and Novartis' venture arms and high-profile life sciences investors like Cormorant, RA Capital, Westlake Village BioPartners, Logos Capital and others are backing that oversubscribed series B to bankroll Expansion's preclinical work.

The proceeds will fund preclinical studies in myotonic dystrophy type 1 (DM1), amyotrophic lateral sclerosis (ALS) and frontotemporal dementia (FTD). Further down the pipeline, Expansion has in-licensed a tau-targeting program that could lead the biotech into Alzheimer's, palsy and other neurodegenerative indications. 

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The Boston biotech aims to enter human trials within three years for its RNA-modulating small molecules, which will likely be delivered orally, said Renato Skerlj, Ph.D., Expansion's president and CEO, in an interview with Fierce Biotech. Skerlj joined the biotech from X4 Pharmaceuticals, where he was chief scientific officer, last October. 

First up in the pipeline is a small molecule for DM1, a cause of adult onset muscular dystrophy that is a result of toxic expansion in RNA. The genetic disease progressively worsens when passed down and impacts about 40,000 people in the U.S., the biotech said. 

Expansion, which derives from the scientific lab of Matt Disney, Ph.D., at Scripps Research, will look to beat out other preclinical biotechs investigating potential DM1 therapies, including Locanabio and Dyne Therapeutics, Skerlj said. Locanabio is tackling the treatment from an RNA-targeting gene therapy approach, and Dyne is looking at an antibody conjugate angle, the CEO said. 

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"These are basically using injectables that will treat one aspect of the disease. I think the advantage of the approach that we’re taking is really leveraging the properties that the small molecule has in terms of being able to basically distribute and penetrate tissue," Skerlj said. 

DM1 is more than just a muscular disease, Skerlj said, given it's cardio and neurological impacts. 

"So with a small molecule that crosses the blood-brain barrier, we are looking to basically treat the entire symptoms of that disease, so it will be a huge benefit for patients and a huge competitive edge for Expansion Therapeutics," the CEO said. 

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Expansion expanded its relationship with Scripps to include two new research programs, with one targeting the tau protein, believed to be a cause of dementias, and the other targeting another undisclosed protein. The tau program is the result of nine years of research out of Disney's lab, Expansion said at the time of the in-licensing in May.

Next up, Expansion will likely hire a head of business development to solidify relationships with Big Pharmas. The company already has Big Pharma backers, with Sanofi and Novartis contributing to Expansion's launch with a $55.3 million in series A financing in January 2018. 

Once GLP toxicology data are in, Expansion could look to a crossover financing round ahead of an initial public offering, Skerlj said.