|Ra CEO Doug Treco|
Watch out, Alexion ($ALXN). Little Ra Pharmaceuticals in Cambridge, MA, is prepping a clinical study of a new drug that it hopes will one day cut in front of your franchise-building blockbuster Soliris. And the biotech has raised $58.5 million from a lineup of big pharma venture arms and A-list investors to back their clinical bet on a rival to one of the world's most expensive drugs.
"Soliris is a really good product for Alexion," Ra CEO Doug Treco tells FierceBiotech. "Our goal was to come up with an alternative therapy that would be more convenient for patients that would be as effective." And after pushing their C5 inhibitor into Phase I clinical studies for paroxysmal nocturnal hemoglobinuria, the plan is to carve into that market and follow up with multiple indications as the biotech grows its pipeline.
Backing Ra is a group of big pharma venture groups, crossover investors and traditional venture players, leaving the door wide open to a possible IPO at a later point. RA Capital Management, Novo Ventures, and Lightstone Ventures led the round, joined by new investors Rock Springs Capital and Limulus Venture Partners. All of the company's existing investors, which include New Enterprise Associates, Novartis Venture Fund, Morgenthaler Ventures and Amgen Ventures, joined in.
Their money should be enough to get through a midstage program on the rival RA101495. The big idea at Ra was to come up with newly engineered peptide therapies that rely on natural and unnatural amino acids to translate peptides' potency into a reliably stable, and more readily used, therapy.
At this stage, says Treco, Soliris is selling for prices north of $500,000, making it a ripe field for head-to-head competition.
"This is a market that needs alternatives and competition," he says. The fresh injection of funds, which will come in two equal tranches, gives them the budget to expand from a staff of 31 to roughly 45 to 50 by the end of next year. And during that time, Ra Pharma's executive team can take some time to consider an IPO or other financing alternatives as they push some preclinical projects down the pipeline and into human studies.
"We're looking at all options, an IPO or other rounds," says Treco. "We're going to look at the market and figure out what's best."