Typically a new biotech assembles a group of investors that collectively puts in the money a fledgling company requires to develop or acquire potential therapies.
Engrail Therapeutics, which emerged from stealth Thursday with $32 million in outside financing, landed its entire Series A funding from a sole source: Nan Fung Life Sciences, a subsidiary of Hong Kong property developer Nan Fung Group.
The round, raised by an eight-person company with one preclinical asset, is a bet on Del Mar, CA-based Engrail’s business model as much as its potential for scientific innovation. President and CEO Vikram Sudarsan says Engrail aims to bring in clinic-ready or clinical-stage neuroscience drugs with validated therapeutic mechanisms to improve the chance they will reach commercialization.
Earlier this year the company struck its first deal, in-licensing ENX-101, a preclinical compound designed to modulate a receptor for GABA, a neurotransmitter in the brain. GABA modulators, including benzodiazepines, have been used for decades to treat patients with neurological disorders including anxiety and epilepsy, but they come with side effects and the risk of drug dependence. Those characteristics have been linked to a lack of selectivity for desired receptor subtypes. The molecule Engrail has licensed is designed to avoid subtypes associated with adverse effects. The company isn’t yet revealing the disease target of ENX-101.
“Pharma has been searching for a long time to crack the puzzle on how to develop a GABA modulator that’s safe and effective and doesn’t come with the same baggage as the typical benzodiazepine class,” Sudarsan says.
Sudarsan adds that Engrail is in late-stage talks with other entities about agreements to further expand its pipeline.
“Our team has been incredibly busy since last November looking for opportunities; we’ve evaluated many, we’ve passed on many, and we continue to look at many opportunities,” he says. “It’s been a very fertile time in the neurosciences, and [there are] a lot of small companies with many pipeline assets that are looking for a good home, so we’re certainly talking to many companies and academic institutions.”
Beyond in-licensing, the company is open to partnerships that involve co-development, as well as company acquisitions. Sudarsan has a background in life sciences and in venture capital, previously serving with Indian generics giant Cipla as CEO of a US unit it started to develop branded products for CNS disorders and respiratory diseases, and as head of strategy for its VC arm.
He founded Engrail with Stephen Cunningham, a longtime pharmaceutical executive who spent more than a decade at Novartis (NYSE: [[ticker:NVS]]), including as head of US clinical development, and, prior to that, a similarly lengthy stretch at AstraZeneca (NYSE: [[ticker:AZN]]).
Heading up corporate development at the biotech is Anil Vootkur, whose experience includes time leading neurosciences global strategic marketing at Allergan (now part of AbbVie (NYSE: [[ticker:ABBV]]) and in a variety of roles at Takeda Pharmaceutical (NYSE: [[ticker:TAK]]).
Other San Diego area biotechs, including Neurocrine Biosciences (NASDAQ: [[ticker:NBIX]]) and Acadia Pharmaceuticals (NASDAQ: [[ticker:ACAD]]), have succeeded in developing new drugs in the notoriously tricky neuroscience field.
Sudarsan says he anticipates the Series A from Nan Fung will allow it to move ENX-101 into the clinic and to make more additions to the company’s pipeline. But if all goes to plan, it sounds unlikely the firm will be hurting financially when that money runs out: Sudarsan described Nan Fung’s support as a long-term commitment, and noted that the life sciences investment subsidiary has a $1.5 billion capital commitment from its parent company.
As of the end of 2019 more than 45 companies had received backing from Nan Fung Life Sciences, including San Diego’s Gossamer Bio (NASDAQ: [[ticker:GOSS]]), Illumina (NASDAQ: [[ticker:ILMN]]) spinout Grail, and Redwood City, CA-based Bolt Biotherapeutics. The Hong Kong conglomerate recently launched a Boston-based life sciences real estate arm, which in recent months splashed out $190 million to snap up an eight-floor building in that city’s Seaport District and a five-story building in its Financial District.
Image: iStock/Artystarty
