Austria's ProtAffin AG is announcing a second venture round this morning after harvesting $18.4 million in a Series B round.
Atlas Venture and SR One Limited--GlaxoSmithKline's venture arm--co-led the round. And existing investors Aescap Venture, Entrepreneurs Fund and Z-Cube also joined in.
"We saw it was reasonably easy to get good levels of interest for first meetings," says CEO Jason Slingsby, who founded the company back in 2005. "However, there are some funds without money at the moment. Some have raised less money than they were hoping," but corporate venture funds attached to large pharma companies are filling the gap left behind.
ProtAffin is using the new venture money to wrap up its pre-clinical work on its lead therapy and push through Phase I. A platform company, the developer is creating engineered versions of proteins that bind to cell surface glycans, or sugars. The Austrian company says that specific glycans play a key role in inflammation linked to a variety of diseases, such as rheumatoid arthritis, COPD, Crohn's disease and cancer. Its lead anti-inflammatory product is PA401, a modified form of the human chemokine IL-8/CXCL8. And ProtAffin plans to use its CellJammer platform to advance new preclinical candidates for development, broadening a thin pipeline.
"We have two other programs at an earlier stage," says Slingsby, "so we are aiming to nominate our second program for preclinical development within the next year."
The new funds--which followed a Series A of €4 million--will be enough to pay for up to three years of operations, says the CEO, who's staying mum for now on exactly when the Phase I trial will get underway. And now that new money has arrived, he adds, the company plans to expand from its current 16 staffers to 27.
Much of the recruiting work will be aimed at building expertise in preclinical development. "However, we will be investing in the platform." And ProtAffin is starting new work in oncology.
At some point, says Slingsby, the company expects to generate partnership deals.
"In terms of our lead product, we want to generate Phase I data before considering partnerships," he says. "We think we can generate some genuine data that can help that value inflection point." And as there are a number of potential programs that could be developed, he adds, other partnerships could be struck for the work that can't be funded in-house.
That research potential has helped woo some key investors.
"ProtAffin is a unique biologics platform company due to its expertise in protein-glycan interactions and we see it as clearly differentiated from monoclonal antibody or scaffold companies," said Dr. Regina Hodits, a partner at Atlas Venture who was named to the company's supervisory board. "ProtAffin has not only a lead program to provide relatively quick clinical data relating to a highly innovative mechanism of action, but also a platform which has already generated a number of promising compounds."
ProtAffin received an orphan drug designation for its lead therapy from the FDA as well as the EMEA last year for prevention of delayed graft function following solid organ transplants. But the key focus now is on chronic diseases with a significant unmet medical need.
If all works according to plan, says the CEO, there should be ample funds to keep growing.
"We believe that there is a potential for long-term independence if we really establish biologics targeting glycans as a broad new therapeutic concept," says Slingsby. "But VCs are not currently waiting for the market to reopen." A series C financing round is an option, he adds, particular now that the company has assembled a "strong syndicate of investors."