VC firm LifeArc sells first portfolio company as dermatitis-focused Ducentis bought by Arcutis for $30M

LifeArc Ventures’ billion-pound investment strategy appears to be paying off, as the British life sciences VC fund saw its first portfolio company sold off in the form of Ducentis BioTherapeutics.

LifeArc has been the biggest investor in Ducentis and its asset DS-234, which is being developed for the treatment of atopic dermatitis. The investigational therapy may not have reached the clinic yet, but it clearly proved a tempting prize for California’s Arcutis Biotherapeutics, which will pay around $30 million in cash and stock for the company, with potential milestone payments to follow.

Ducentis’ technology centers on the CD200/CD200R axis, a checkpoint pathway that the company says offers a highly differentiated mechanism of action to control unwanted or exaggerated immune responses. While it’s currently focused on atopic dermatitis, Ducentis believes CD200 agonists have the potential to expand into multiple inflammatory conditions, including central nervous system diseases mediated by chronic inflammation.

The acquisition values the biotech at $400 million and marks a major win for LifeArc since the VC firm doubled its projected annual average spend when it set out a plan last November to invest 1.3 billion pounds sterling ($1.5 billion) in life-changing science by 2030.

For immuno-dermatology-focused Arcutis, DS-234 fits in nicely alongside the company’s newly approved Zoryve in psoriasis. 

"We are excited by the promise of checkpoint agonism as an emerging strategy for the treatment of atopic dermatitis,” said Arcutis CEO Frank Watanabe in a Sept. 8 release. “Additionally, with the majority of our clinical, manufacturing and commercial teams already possessing experience with biologic agents, DS-234 fits well with our team’s expertise. With a modest investment, we believe we can generate proof-of-concept data against a de-risked target in a high-value indication.”

In May, another of LifeArc’s companies saw success when British biotech RQ Biotechnology licensed its early-stage monoclonal antibody against SARS-CoV-2 to U.K.-based big pharma AstraZeneca. LifeArc is co-founder and sole funder of RQ Bio.