Six biotech spinouts you should watch out for this year

Photo/Elena Resko
Biotech spinouts

Academic spinouts are companies that are typically formed from research taking place at academic institutions and are sometimes launched and owned by the university. A means to turn research into products of commercial value, the biotech industry has witnessed quite a few spinouts develop from research projects over the years.

In the U.K. alone, the biotech and pharma spinout industry has acquired over £6.1 billion ($7.8 million) in investments over the past two decades, according to Source Advisors’ University Spinouts Report 2021. University of Oxford was deemed to have the highest value of spinouts, and University of Dundee spinout Exscientia, which specializes in artificial intelligence (AI)-based drug discovery, became renowned as the most successful spinout in the U.K. in the past decade. Around the world, academic centers like Karolinska Institutet in Sweden and Massachusetts Institute of Technology in the U.S., among many others, have been home to numerous biopharma spinouts.

Here are six biotech spinouts across the globe that have received funding over the past year for their various programs that are presently in development, that you should know about.

Table of contents

    Colorifix

    As petrochemical dyes contain harmful chemicals in addition to the industry using five trillion liters of water every year, University of Cambridge spin-out biotech Colorifix aims to tackle this problem.

    With the goal to replace synthetic dyes, the company engineers microbes to produce natural dyes. The colors, which are typically created by an organism, be it plants, insects or microorganisms, are identified, and the genes responsible for pigmentation are discovered through DNA sequencing. Then, the organism is engineered to produce the specific pigment. 

    The biotech spinout also ships its genetically engineered microbes so that other companies can create pigments through the process of fermentation. This is very similar to beer brewing, where the microbes proliferate with the help of a nutrient medium, and in this case, colorful dye is produced within just a few days. The dyes are then placed into dye machines that dye different kinds of fabrics without having to resort to using toxic chemicals.

    As the U.K.-based spinout pushes towards sustainable development, Colorifix has collaborated with Swedish multinational fashion brand H&M to further develop its product, which is said to not only reduce water and chemical usage by 77% and 80% respectively, but also contribute to a substantial decline in ozone layer depletion.

    Established in 2016, the company has amassed a total of $31.8 million in three rounds of funding, with the latest series B round led by H&M Group Ventures raising $22.7 million last year.

    Complement Therapeutics 

    Age-related macular degeneration (AMD) is a progressive degenerative disease that occurs when the macula – which is at the center of the retina – becomes damaged with age. Overtime, it can culminate in vision loss. U.K.-based Complement Therapeutics aims to treat AMD by targeting the complement system.

    The cascade is composed of  plasma proteins that fight infections by inducing inflammatory responses. However, the dysregulation of these pathways can lead to diseases like AMD and hematological conditions. The startup’s current focus is on its lead candidate CTx001 for late-stage AMD, which is an AAV-based gene therapy  in preclinical trials. CTx001 is set to begin clinical trials in 2024. Complement Therapeutics is also developing CTx002, CTx003 and CTx004 that target complement mediated renal diseases, FHR dysregulation and complement mediated neuroinflammation respectively.

    Moreover, the company’s Complement Precision Medicine (CPM) platform can measure over 30 complement proteins from a blood sample.   

    Earlier this year, the company, which was spun out of the University of Manchester with initial funding from BioGeneration Ventures (BGV) in 2021, bagged €72 million ($78.5 million) in a series A financing round that saw participation from Forbion, BGV, Panakes Partners and Cambridge Innovation Capital (CIC) among others.

    Delix Therapeutics 

    In neuropsychiatric diseases, neurons in certain regions of the brain degenerate and synapses are lost, leading to impaired cognition and disrupted mood among other symptoms. As more than a billion people live with neuropsychiatric conditions, there is an unmet need for newer treatments. Delix Therapeutics has discovered a class of drugs called psychoplastogens to tackle diseases like depression.

    Psychoplastogens are capable of regrowing these atrophied neurons, in an attempt to restore neuronal circuitry in the brain. While first and second generation psychoplastogens like ketamine and psilocybin are hallucinogens that can cause poor reactions and cardiovascular issues, the company is developing third generation psychoplastogens, which are non-hallucinogenic and have an improved safety record.

    Most advanced in its pipeline is the drug candidate DLX-001, a therapy for treatment-resistant major depressive disorder, which is currently in phase 1 of clinical trials. This candidate could be significant to psychiatric research as 80% of patients are claimed to experience no symptom relief from current treatments.

    Founded by a University of California, Davis, professor in 2019, the company is based in the biotech hub of Boston. The company has obtained a total of $118 million in funding over five rounds, with the latest one having taken place in 2022. The most recent investors include life sciences investment company Comerica.

    Epic Bio

    Focused in the field of epigenetics, U.S.-based Epic Bio was spun out of Stanford University in 2018. The startup has built the Gene Expression Modulation System (GEMS), its platform technology, to treat a number of diseases.

    When epigenomes – which controls how DNA is read – become faulty, where the genes are not expressed properly, this can cause diseases. The GEMS platform consists of a non-cutting CRISPR-CAS variant, which is able to identify genes, and gene expression modulators, and aims to correct the way in which genes are read. The company uses gene engineering to optimize DNA binding proteins. Furthermore, the company’s CasMINI is the smallest CAS protein that has ever been created, through which the startup aims to tackle challenges like delivery and safety risks posed by CRISPR-CAS9 gene editing when targeting epigenetic controls on gene expression.

    There are different kinds of modulators including histone activating and repressing ones – which can catalyze the attachment or removal of methyl and acetyl groups on histones to enable gene expression. The company is developing five candidates via its GEMS platform. The most advanced one in its pipeline is EPI-321, for treating facioscapulohumeral muscular dystrophy (FSHD). EPI-321 is designed to turn off the expression of the DUX4 gene as the gene tends to be overexpressed in the case of FSHD. Having presented promising results for EPI-321 as it showed favorable pharmacokinetics and safety profiles, the company aims to file its Investigational New Drug (IND) application with the U.S. Food And Drug Administration later this year.

    Epic Bio raised $55 million in a series A financing round last year.

    KinSea Lead Discovery AS

    A biotech spinout from The Arctic University of Norway (UiT), the University of Bergen (UiB), Norinnova, and the Lead Discovery Center GmbH (LDC), KinSea Lead Discovery AS was founded last September. The startup is focused on developing marine bioactives for the treatment of certain kinds of cancers.

    As marine organisms are rich in bioactives, which are compounds that often have nutritional properties and promote good health, the company has come up with a way to extract and utilize these compounds from the Arctic Ocean, to treat acute myeloid leukemia (AML) and hematological tumors. Although more is yet to be revealed about its pipeline, Its first candidate is a targeted therapy based on the action of FLT3 inhibitors. These are multi-kinase inhibitors that kill cancer cells by binding to the mutated FLT3 protein and blocking its activity. Having successfully completed an animal proof-of-concept study, the company aims to further examine its candidate in preclinical trials.

    Set up in the Norwegian city of Tromsø, KinSea Lead Discovery AS secured seed financing from KHAN Technology Transfer Fund I GmbH & Co KG (KHAN-I), a German early-stage life sciences venture capital firm, this year. It has previously obtained funding from the Norwegian Research Council and the regional biotech program MABIT as well.

    Morphoceuticals

    A spinout of Tufts University in Massachusetts, U.S., Morphoceuticals has been gaining traction in the field of regenerative medicine, specifically in limb regeneration.

    Researchers were able to regrow the leg of Xenopus laevis, the African clawed frog, through the process of RNA sequencing of early tissue buds, which resulted in the activation of pathways that aid in tissue development. The study found that a multidrug course was able to regrow the frog’s hind leg. The leg was wrapped in a silicone cap, which contained medicines to decrease inflammation and collagen formation to prevent the growth of scar tissue – which impedes normal tissue development. The biotech spinout was able to regenerate tissues to create an almost fully-functional leg – excluding the webbing of the feet – which allowed the frog to swim. The experiment, which was conducted on numerous frogs, offers hope to millions of people who have undergone amputation due to factors like trauma and diabetes, although the company is yet to proceed with human trials.

    Founded three years ago, Morphoceuticals has received a total of $8 million from a seed funding round that took place in January this year. Investors who participated in the financing round included British biotech company Juvenescence and startup investor Prime Movers Lab.  

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