HotSpot Therapeutics set out two years ago to find new ways to address elusive disease targets. It now has molecules on the path to becoming potential medicines backed by a fresh $65 million.
The Series B round of funding announced Thursday was led by SR One, the venture investment arm of GlaxoSmithKline (NYSE: [[ticker:GSK]]). The new cash follows a 2018 Series A financing that raised $45 million.
“The Series A was all about demonstrating and building the technology,” HotSpot co-founder and CEO Jonathan Montagu says. “Now it’s about showing how it can work in patients.”
Boston-based HotSpot is developing allosteric drugs—small molecules that hit less obvious places on a protein. The places that drugs typically target are called active sites. If a protein is a car, the active site is the catalytic engine, Montagu says. It’s what makes a protein run, and it’s what most drug hunters try to hit one way or another. Binding a drug to a molecule’s active site treats disease by sparking some activity or stopping it.
But there are good reasons to aim for non-active sites, Montagu says. Sometimes hitting active sites triggers unwanted effects or can affect molecules that are in the same family of proteins. In other cases, a protein doesn’t even have active sites. Hitting those proteins in the right way can have an effect on disease.
If an active site is the catalytic engine, non-active sites are like the gear shift, Montagu says. They regulate proteins. HotSpot’s software identifies non-active sites and helps scientists understand how those sites regulate the protein. The next step is finding molecules to hit those non-active spots. HotSpot screens libraries of molecules to find the most promising ones and develops them into potential drugs. The company added to its screening capabilities with the acquisition last year of Macroceutics and its DNA-encoded libraries comprised of about 1 billion compounds.
HotSpot has two lead programs, one of which Montagu suggests could produce a drug that challenges a blockbuster product marketed by Sanofi (NYSE: [[ticker:SNY]]). The program targets protein kinase C (PKC-theta), and HotSpot is developing it for autoimmune diseases driven by T helper type 2 cells (Th2) and regulatory T cells (Tregs). The disease targets include the inflammatory disorder atopic dermatitis, which is driven by a Th2 response that causes the red, itchy skin characteristic of the disease. The Sanofi product, dupilumab (Dupixent), is an injectable antibody drug. Montagu says HotSpot’s program gives it the opportunity to develop the first oral Th2 drug.
The second lead program targets S6 kinase and is being developed for rare metabolic diseases. Montagu says he expects HotSpot will select the molecules it will advance to target both proteins by the end of this year, followed by an application to begin clinical trials next year. The goal is to start clinical trials by the end of 2021. If all goes well, Montagu says the studies could provide data backing its belief that its technology works in humans, which could in turn support a crossover round of investment, followed by an IPO.
The latest investment added new financial backers Tekla Capital Management, MRL Ventures Fund, Solasta Ventures, and Brace Pharma via its affiliate, Cleva Pharma. Earlier investors Atlas Venture and Sofinnova Partners also participated. The capital will fund the development of both HotSpot lead programs, as well as its pipeline. HotSpot’s discovery-stage targets include transcription factors, proteins that regulate genes by turning them on or off. Montagu says the pharmaceutical industry is eying transcription factors because these proteins do not have active sites, making them “undruggable” by conventional small molecule approaches.
Another discovery-stage program is being developed to target E3 ligases, proteins that have attracted interest from small biotechs and big pharmaceutical companies for their role in targeted protein degradation, an experimental approach to treating disease by use the cellular process for disposing of damaged or unwanted proteins. Montagu says E3 ligases also play a role in cancer and stand on their own as potential drug targets, so his company is exploring oncology applications. Both discovery-stage programs could end up in the hands of a large pharmaceutical partner.
“We’ve chosen targets that we know are of interest to pharma,” Montagu says. “Some we’ll take into the clinic ourselves. Others will be taken into collaboration with pharma.”
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