Gene therapy companies have been especially vulnerable to a public market downturn that’s shaken the biotech sector. But the difficult environment hasn’t stopped venture firms from betting on the science, as evidenced by the launch of a startup on Tuesday that’s raised up to $67 million in early funding.
The company, Apertura Gene Therapy, was built around separate technologies developed at Harvard University and the Broad Institute — two institutions well-known for their contributions to genetic medicine. Apertura believes these tools can help deliver treatments to the right cells and express precise amounts of key proteins, which might help to overcome some of the challenges that have hampered gene therapy research.
“The majority of gene therapy programs would really benefit from better delivery and better expression,” said Dave Greenwald, Apertura’s acting CEO, in an interview. “There's a lot of potential for our technology to be brought to bear.”
Greenwald also serves as vice president of business development at Deerfield Management, an investment firm specialized in healthcare and life sciences startups. Deerfield incubated Apertura over the last year or so, and is singularly supplying its Series A financing round.
Notably, Apertura’s launch comes during one of the most challenging periods in recent memory for the biotech industry. The two main ways in which early investors of drug startups see returns on their investments — acquisitions and initial public offerings — have stagnated, forcing startups to stay private for longer and raise additional financing rounds. Meanwhile, the XBI, a closely watched stock index that includes many of the world’s most prominent biotech companies, has fallen more than 40% over the past year.
Gene therapy developers, some of which have run into issues testing their treatments, appear to have been hit particularly hard by the change in investor sentiment. At least 10 of these companies have announced layoffs, restructurings or other cost-cutting measures since December.
Greenwald, however, is taking a long-term view, betting that interest in gene therapy research will be there once the downturn is over. “The financial markets for biotech are certainly not where they were a year ago. And we do keep a close eye on that,” he said.
“That being said … we haven't wavered in our support of the company,” Greenwald added. “I am hopeful that whatever correction we're going through right now abates, and the tide turns back to positive news and outcomes for innovative companies like Apertura.”
Apertura isn’t alone in its ambitions. Multiple other startups, including Generation Bio, Stride Bio, Affinia Therapeutics and Dyno Therapeutics, have launched in recent years with the goal of improving gene therapy technology.
But while these companies have attracted interest from private investors and larger pharmaceutical firms, their work mostly remains in the earlier stages of drug discovery and research. And in some cases there have been setbacks. Generation Bio, for instance, lost more than half its market value in December after animal studies produced results that disappointed investors.
Apertura is early in its journey as well, though Greenwald and others argue that the company’s blend of technologies helps to differentiate it from competitors.
“The fundamentals of why we founded Apertura haven't changed. We know there's a ton of potential in gene therapy; we're only scratching the surface of it,” said Kristina Wang, a board member and director of the company’s corporate development.
One of Apertura’s platforms, created in the lab of Ben Deverman, the senior director of vector engineering at the Broad Institute and Harvard, focuses on the viral shells used to shuttle gene therapies into cells. Specifically, it’s meant to create shells that are customized to certain diseases.
Apertura’s other technology was developed in the lab of Michael Greenberg, chair of the neurobiology department at Harvard Medical School, and it revolves around “fine-tuning” the amount of activity genetic medicines trigger once inside the target cells.
“Our platform is unique in that it allows us to do multiple things simultaneously. Those two approaches,” said Deerfield’s Greenwald, “actually work together hand in hand.”
Greenwald added that the technologies could be used to advance gene therapies for “a wide variety of genetic diseases,” though Apertura isn’t yet disclosing which diseases it plans to go after or when any of its programs might enter human testing.
In the meantime, the company will deploy the funding from Deerfield.
According to Greenwald, the up-to-$67 million figure was a “very deliberate number” that was based on “the appropriate amount to raise at this stage for the company.” He said Apertura could have been brought in front of other investors, but Deerfield felt it had the capacity to nurture and finance the company on its own.
That stance could change, though.
“At the appropriate time, we're certainly open to exploring other options,” Greenwald said.