Publicly traded biotech stocks have been getting pounded during this year’s J.P. Morgan Healthcare Conference in San Francisco, but money is still flowing into privately held startups this week. The latest is Syros Pharmaceuticals, which continues to add to its syndicate of backers.
Cambridge, MA-based Syros, a startup founded by Flagship Ventures and Arch Venture Partners in 2013, raised $40 million in new funding. Syros has brought in two more so-called crossover investors in the funding—Deerfield Management and Casdin Capital—adding to the likes of Fidelity Management and Research, Redmile Group, WuXi Healthcare Ventures and others. It’s the third sizeable round Syros has raised since its inception, adding onto a $30 million Series A in 2013 and a $53 million financing a year later.
Recent history would suggest that this round positions Syros to make a run at an IPO. During the sector’s bull run of 2013-2015, biotechs often amassed this type of investor group and parlayed it into a public offering. But biotech is no longer the hot commodity it was a year ago, when newly public companies were pulling in big valuations. A raft of private biotechs recently filed for IPOs, including Editas Medicine, Syndax Pharmaceutials, and Audentes Therapeutics; how they fare should be a good indicator of the market’s appetite for the likes of a Syros.
Whether it is aiming to go public this year or not, Syros will use its latest cash haul to move its lead drug, known as SY-1425, into Phase 2 testing this year for a genetic subset of patients with acute myelogenous leukemia and myelodysplastic syndrome. The drug is a test case for the work Syros has been doing behind the scenes building a discovery engine. As CEO Nancy Simonian (pictured) told Xconomy a few months ago, the company has spent more than two years developing a platform that the company uses as a “lens” to look into how genes are regulated and go awry in disease, ultimately with the hope of finding new drug targets.
Simonian calls these “gene control maps,” and as Alex Lash explains here, Syros uses them to identify “super enhancers,” which are effectively master switches responsible for turning certain genes on and off.
Syros found a subgroup of AML patients with a super enhancer that controls a gene called retonic acid receptor alpha, or RARa, a transcription factor that helps regulate other genes.
It then cut a deal with a Japanese company called TMRC Co. for an experimental drug called tamibarotene that targets RARa. That drug is approved in Japan for a different form of leukemia—acute promyelocytic leukemia. Syros is carrying it forward for AML as SY-1425.
The firm is making drugs in-house as well, and as Simonian told Xconomy, aims to develop therapies for cancer and autoimmune diseases. Branching out beyond just cancer treatments and into immunology was “one of the stated objectives of the [Series B] financing” in 2014, Simonian said.
