 | |  |
CombinatoRX Raises $40M
by Katherine Goncharoff
The Boston-based drug platform developer CombinatoRX Inc. said Thursday, Sept. 19, it has landed $40 million in second-round funding, managing to entice a group of experienced biotech investors.
The deal, led by Flagship Ventures of Cambridge, Mass., is also notable as one of the largest biotech venture fundings this year following a $70 million second round for Infinity Pharmaceuticals Inc. and $108.5 million raised by Eyetech Pharmaceuticals Inc.
The deal gives CombinatoRX $57.5 million total in equity funding, an international roster of investors and a post-round valuation of about $73 million, said founder and CEO Alexis Borisy.
Borisy said the fund raising took six months with the assistance of Boston's Rockport Ventures as a placement agent in Europe, though none in the U.S. Rubin and Rudman LLP advised CombinatoRX while the investor group worked with Hale and Dorr LLP.
The round also featured existing biotech investors Canaan Partners, TL Ventures, BioVentures Investors and Foundation Medical Partners. New backers included Adams Street Partners, Novartis BioVentures Ltd., Global Life Science Ventures, POSCO BioVentures Ltd., Private Life Biomed AG, CDIB BioScience Ventures Inc. and China Development Industrial Bank. Angel investor Jacob D. Goldfield, who is the firm's chairman, also participated in this latest round.
"Our initial seed investment of $2.5 million came two years ago from someone an old college friend introduced me to - Jacob Goldfield - formerly a senior partner at Goldman Sachs and a bit of a legend," Borisy said.
CombinatoRx is developing a drug discovery platform that screens combinations of compounds at high throughput.
"What is somewhat novel about what CombinatoRX is doing is that they are using a systems biology approach to the treatment of diseases and they are taking finished molecules and drugs in a variety of combinations to see if they can close off the multiple pathways of a disease - it's a kind of blitzkrieg effect," said David Webster, a biotech adviser and management consultant with The Webster Consulting Group in Bethlehem, Pa.
Seth Rudnick, a partner at Canaan Partners, said CombinatoRX also has two products in early-stage clinical trials, targeting cancer and chronic fungal infections. The company declined to provide their names or additional details. Borisy said the company has more than 40 patents under application but has not yet obtained approvals.
Douglas Cole, who led Flagship Ventures' investment in CombinatoRX, said, "This is a company that has executed quite crisply on their plan in the first two years of life by developing the company infrastructure, validating their technology and identifying two novel clinical trial candidates in two years, which is quite remarkable for a startup company."
Even after acknowledging the company's novel platform approach, Webster was nonetheless skeptical. He said that all large pharmaceutical companies boast high-throughput screening, and if they see evidence of CombinatoRX's success, will develop their own similar systems using compounds in their own libraries.
"[CombinatoRX] will truly have to capture the value of their intellectual property, and if they don't, their competitive advantage will simply wither away," he said.
"This is what has been the death of platform startup companies before in the biotech sector. If the platform is new and exciting, then Big Pharma simply goes and replicates it."
From TheDeal.com
| | |
