Acelyrin, a Californian biotechnology startup, has raised a $300 million Series C round that’ll be used to support late-stage clinical testing of a drug it’s developing for a range of inflammatory diseases, the company announced Tuesday.
The funding will bankroll two Phase 3 trials of a drug prospect known as izokibep. In 2021, Acelyrin paid $25 million to acquire the drug from Swedish drugmaker Affibody. It’s since raised more than half a billion dollars and completed Phase 2 trials in two types of inflammatory conditions, psoriatic arthritis and axial spondyloarthritis. Now it aims to bring the medicine into the final stages of human testing.
That type of profile would typically make Acelyrin a candidate for an initial public offering. But the turbulent state of the public markets led the Los Angeles-based company to raise another round of private funding instead.
“The goal of the $300 million was twofold: one was to accelerate the psoriatic arthritis and axial spondyloarthritis programs, two was to ensure those programs would be funded all the way through to [a regulatory] filing,” Paul Peloso, chief medical officer at Acelyrin, said in an interview with BioPharma Dive.
Izokibep is a small molecule drug that targets an immune system-regulating protein called interleukin-17A, or IL-17A. The protein is well known to drug developers, as it’s the target of Novartis’s Cosentyx and Eli Lilly’s Taltz. Bausch Health’s Siliq targets the related IL-17 receptor A. Studies show drugs that stop IL-17 from binding to its receptor can reduce the inflammation, as well as the amount of swelling and pain. Multiple are approved to treat psoriatic arthritis and other inflammatory conditions.
Yet psoriatic arthritis is a crowded field. In addition to the other IL-17 inhibitors, a variety of other medications are available to patients too, including pills known as JAK inhibitors. Acelyrin believes its drug can stand out because of its potential to be more potent.
“We think the trade-off of better efficacy against something a little less convenient is an easy one for patients,” Peloso said.
The company will also use the funds to continue trials for izokibep in treating a type of skin lesion called hidradenitis suppurativa and uveitis, a form of eye inflammation.
Co-founded and led by Shao-Lee Lin, who was previously chief scientific officer at Horizon Therapeutics and worked at AbbVie, Gilead and Amgen before that, Acelyrin was created in 2020 and raised a $250 million Series B last November.
Access Biotechnology was the lead investor in Acelyrin's latest round, which also included participation from Westlake Village BioPartners, Samsara BioCapital and AyurMaya, an affiliate of Matrix Capital Management.
Though a record 104 biotech companies priced an IPO in 2021, the pace of new offerings has slowed considerably in 2022, with just 17 to date. Some companies looking for funding have instead opted for additional rounds of private fundraising, investors have said.
Though it isn’t going public just yet, Acelyrin has not ruled out a potential IPO, Peloso said.
“Now we can just execute and wait for the optimal market dynamics to make the next move,” he said.