Covagen gets up to $63M in VC round for multitargeted antibodies

Researchers at Swiss biotech startup Covagen are in the business of building multitargeted antibodies, new bi- and trispecific therapies which are created by fusing short proteins onto the arms and tail of the Y-shaped body of the original structure. Today the company landed a new round of venture backing that could reach up to $63 million, enough to take the company through Phase II for its lead anti-inflammatory drug--which will start out in Phase I for psoriasis next year--along with some follow-up work in oncology.

The VC group is starting the round with an initial commitment of $47 million, to be paid in tranches, with the rest contingent on hitting some milestones in their development program. Gimv is leading the round, with existing investors Novartis Venture Fund, Edmond de Rothschild Investment Partners, Seroba Kernel Life Sciences, Ventech and MP Healthcare Venture Management joining Ascent Biomedical Ventures to round out the field of investors. This new money follows the $16 million raised to launch the company.

The venture group was drawn in by the lure of Covagen's "FynomAb" platform, which spawned COVA322, a bispecific TNF/IL-17A inhibitor with anti-inflammatory potential.

"We have just completed the preclinical development program," CSO and cofounder Dragan Grabulovski tells FierceBiotech. Aside from establishing safety while looking for early indications of activity in Phase I early next year, he adds, the company plans to follow up with a study on psoriatic arthritis, where Covagen believes it has a good shot at moving the dial on efficacy. The executive team is also keen to use the platform to build an oncology pipeline, with new work being planned on CD3 therapeutics, the red-hot field of immunomodulation and bispecific antibody-drug conjugates, or "armed" antibodies that promise to follow up on the success of first-generation therapies like Roche's ($RHHBY) Kadcyla.

Covagen has already forged one collaboration pact, a discovery deal with Mitsubishi Tanabe. And like any good platform company, the biotech wants to follow up on its current round of discussions involving potential industry partners interested in striking more such pacts.

Mitsubishi and Covagen announced just days ago that they were expanding their deal. Covagen initially gained $5.25 million on the front end of the Mitsubishi deal for the first pair of unspecified targets and up to $142 million in potential milestones. Mitsubishi has an option on the bispecific drugs against a second pair of targets, with similar financial rewards in store for Covagen as the first program. 

"We are very interested in partnering our platform as we did with Mitsubishi," says CEO Julian Bertschinger, adding that he expects to ink at least one new partnership deal next year. Covagen currently has a staff of 26, which the CEO says should continue to grow.

- read the release