Receptos founder returns with ShouTi and $100M for oral drugs to treat chronic diseases

First it was Syrrx. Then, Receptos. Now, Raymond Stevens, Ph.D., has gathered $100 million to fuel ShouTi, a biotech he founded in 2017 to convert biologics and peptides into small-molecule drugs that you can take orally to treat chronic diseases.

The Shanghai and San Francisco biotech will use the funds to bring targets and technologies discovered at subsidiary Basecamp Bio up to the mountaintop, or through the clinic.

“I think the pendulum has swung very far in terms of companies have been developing more and more biologics. That creates a real opportunity globally to be able to convert them into small molecules and make them accessible to all," Stevens said in an interview with Fierce Biotech.

Up first is pulmonary arterial hypertension, or high blood pressure in the lungs and heart. ShouTi is on target to finish a phase 1 safety study in Australia of its lead candidate in that disease by early next year, Stevens said. The biotech is "looking primarily at the U.S. market" for the drug's phase 2 study.

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Up next, ShouTi's second program is slated to enter a human trial early next year for patients with Type 2 diabetes, Stevens said. A third program will have more clarity soon, he added.  

ShouTi's origins date back to Stevens' work at Receptos, which he co-founded in the late 2000s. Celgene, now owned by Bristol Myers Squibb, bought Receptos for $7.2 billion in 2015 to get access to ozanimod. That drug has since secured FDA approval for use in ulcerative colitis in May and multiple sclerosis in March 2020.

"When that got acquired, the platform was working very well, but Celgene only wanted the asset [ozanimod] itself. So, we saw an opportunity to continue advancing the platform itself within an academic institution, at Scripps," Stevens said.

He then linked arms with computational chemistry company Schrödinger, of which he's friends with founder Rich Friesner, to form ShouTi in hopes of further developing the platform.

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Stevens also founded Syrrx, which Takeda bought for about $270 million in 2005.

Next to Stevens in the C-suite are Chief Medical Officer Mark Bach, M.D., Ph.D.; Chief Business Officer Melita Sun Jung; Chief Technology Officer Michael Hanson, Ph.D.; Chief Scientific Officer Xichen Lin, Ph.D.; and Chief Operating Officer Jun Yoon.

Bach joined this summer after serving as a senior vice president at Ascendis Pharma for less than a year. Before that, he spent a decade at Johnson & Johnson's Janssen and about 17 years at Merck. Jung also joined in recent months after heading up business development at Sangamo Therapeutics.

The series B was led by BVF Partners. Other backers include Casdin Capital, Cormorant, Janus Henderson, Lilly Asia Ventures and more than a dozen other VC shops. The round brings ShouTi's total financing to $158 million.