Dive Brief:

• Perceptive Xontogeny Venture Funds and venBio Partners are contributing up to $40 million to a spinout of genetic medicine maker Lexeo Therapeutics to that will aim to advance drugs for heart conditions.
• The new biotech will focus on RNA-based medicines for genetically mediated cardiac conditions using a non-viral delivery method, according to a Tuesday announcement from Lexeo.
• Under the agreement, Lexeo will hold double-digit percentage equity in the new company, and could receive future milestone payments, royalties and opt-in rights to its programs.

Dive Insight:

Lexeo is developing treatments for heart conditions, such as cardiomyopathy associated with Friedreich’s ataxia and plakophilin-2 arrhythmia. Both programs are in early human studies.

Interim results from an early-stage trial last year showed Lexeo’s Friedreich’s ataxia drug, LX2006, reduced signs associated with heart complications among a small group of study participants. Lexeo will assess the drug’s efficacy by measuring levels of a protein called frataxin and reductions in left ventricular mass index, under an agreement with the Food and Drug Administration on the design of a planned registrational study.

The company has faced some bumps along the way, including a smaller-than-projected IPO in 2023. Earlier this year, it laid off 15% of its workforce. In a filing with the Securities and Exchange Commission in March, Lexeo said it was seeking “business development opportunities” for its portfolio of Alzheimer’s disease treatments, one of which it has brought into the clinic.

Now, Lexeo is lending its expertise to a new biotechnology company, which its CEO R. Nolan Townsend said will help “realize the therapeutic and economic value of promising preclinical science.”

Townsend noted how non-viral delivery methods will help genetic medicines treat a broader array of conditions, such as those affecting the heart. The statement did not specify where the non-viral delivery technology the new startup will use comes from.

“We see this as one of the most promising areas in biotech, where there is both a significant need and clear opportunity for innovation through the development of RNA therapeutics for cardiac disease,” Fred Callori, managing director of PXV Funds, said in a statement.

Perceptive and venBio raised major funds in the last five years to support the creation of new biotech companies. Last fall, they both backed a precision brain medicine company called Axonis Therapeutics, with the latter co-leading a $115 million investment to develop an epilepsy and pain drug.