Metagenomi, a biotech startup that three months ago struck a research alliance with Moderna, has raised $175 million to expand and build on its early research exploring new ways to edit genes.
The Series B round is sizable for a company at Metagenomi's stage and comes as biotech startups, accustomed to record levels of investment in recent years, face a tougher market environment. Shares of publicly traded drugmakers have fallen significantly, adding new risk to what's typically been a fast track toward an initial stock offering for young biotechs.
Still, Simon Harnest, Metagenomi's chief investment officer, said the company had significant interest from new investors and raised money at a valuation that was "a multiple" of what was set in Metagenomi's Series A. "This is really a testament to the story and the team itself that we were able to pull off such a financing in probably one of the worst biotech markets on the public side," he added.
A broad group of investors backed Metagenomi in the funding round, which was led by PFM Health Sciences, Farallon Capital Management and a third undisclosed firm. More than a dozen others chipped in, including Moderna, Bristol Myers Squibb, the parent company of Danish drugmaker Novo Nordisk and Leaps, the venture arm of Bayer and a previous investor in Metagenomi.
Launched three years ago by scientists from the University of California, Berkeley, Metagenomi has an ambitious vision for gene editing's future. The company says it can mine large datasets of microbial DNA to identify new CRISPR-based enzymes capable of editing genes in ways that improve on the Cas9 enzyme made famous by Jennifer Doudna and Emmanuelle Charpentier. A paper describing such work, written by Metagenomi CEO Brian Thomas and others, was published in The CRISPR Journal in December 2020.
Thomas, in an interview, said finding editing systems that go beyond CRISPR-cas9's capabilities will allow Metagenomi to target diseases and indications that "are much more complex and not being addressed today."
"I think that all comes with the ability to rewrite larger pieces of the human genome, instead of just cutting a specific site and then hoping you get an integration at that site," he said. "We can now start to really edit the human genome with a much larger tool set."
All of Metagenomi's current work is in early preclinical stages. The company has disclosed research into "in vivo," or inside the body, gene editing for hemophilia and a rare type of kidney disease, as well as "ex vivo" programs in cancer cell therapy.
Harnest said the funding should help Metagenomi advance those programs, potentially to the point of asking the Food and Drug Administration for permission to begin human testing.
Additionally, the additional cash will allow the company to explore how best to get its gene editing treatments to the right tissues in the body.
"I think part of our efforts will be looking for the future of delivery capabilities," said Thomas.
Metagenomi's partnership with Moderna is a step in that direction, too, as the COVID-19 vaccine maker specializes in lipid nanoparticles that can be used to shuttle genetic instructions into cells.