Alder Biopharmaceuticals has nailed down the biggest round of venture capital the Seattle biotech community has seen in a long time.
The Bothell, WA-based antibody drug developer is announcing today it has raised $38 million in a Series D financing led by new investor Novo Ventures. All of Alder’s previous backers— Sevin Rosen Funds, Ventures West, HIG Ventures, TPG Biotech, Delphi Ventures, and WRF Capital—also joined the new round. Alder, founded as a bootstrapped company in 2004, has now raised a combined $105 million in its four venture deals, and has also pulled in at least another $100 million in cash through a partnership with New York-based pharma company Bristol-Myers Squibb (NYSE: [[ticker:BMY]]).
The new cash infusion will be used to help Alder hire another 10-15 people and move ahead more aggressively with clinical trials of three drug candidates for patients with cancer, migraine headaches, and high cholesterol. The big idea at the company remains unchanged: to manufacture antibody drugs in fast-dividing yeast cells instead of traditional mammalian cells. Alder looks to apply that technology to make “fast-follower” antibody drugs that are faster and cheaper to produce than its rivals’ products, and which are engineered to provide certain advantages to patients, like fewer injections. The venture financing for Alder is the biggest in Seattle biotech since Calistoga Pharmaceuticals raised $40 million in June 2010.
“We’re putting ourselves in a position of strength moving forward,” says Randy Schatzman, Alder’s co-founder and CEO. “The beauty is while ALD518 [the company’s first drug candidate] is in the clinic and succeeding, the guys in the lab have been successful in making other drug candidates. This financing allows us to push them forward.”
While Alder isn’t disclosing its new valuation as part of the financing, the company is now worth more than it was the last time it raised money, meaning this is a so-called ‘up’ round, says Mark Litton, the chief business officer.
Thong Le, a founding investor in Alder from WRF Capital, and a board observer, says Novo made sense as the new lead investor because it understands the field, has deep pockets, and patience. Even though Le says Alder had “plenty of cash” on its balance sheet to keep operating, raising more now means will enable it to put its foot on the gas in clinical development, without worrying about putting programs on hold if other partnerships are slow to materialize.
“The reason they pursued this financing was to control their own destiny,” Le says.
Alder’s first big break on the national scene came in November 2009 when Bristol-Myers agreed to pay $85 million upfront and as much as $1 billion in milestones over time for the right to co-develop Alder’s ALD518 (aka BMS-945429) for autoimmune disorders like rheumatoid arthritis. Although that drug has shown some compelling clinical trial results, it isn’t about to hit the market overnight. Alder’s promising clinical trial results for rheumatoid arthritis were achieved with an intravenous form of the antibody, which means patients needed to come to the doctor’s office, which isn’t nearly as convenient as other products that patients can inject themselves at home or work. So Alder and Bristol have worked the past couple years to reformulate ALD518 into a more convenient, self-injectable form as it heads into the final phase of clinical trials required for FDA approval.
Part of the Bristol-Myers deal, however, enabled Alder to retain
