Selecta Biosciences, a secretive biotech startup, is breaking its silence today to reveal the closing of a $15.1 million second round of financing. The sizable round is a rarity during what has been a financial drought for most young biotech firms, yet the founders of Watertown, MA-based Selecta say the startup has attracted investors due its unique nanoparticle drugs for activating the immune system.
The cash infusion came from Boston-area backers Flagship Ventures and Polaris Venture Partners—both of which contributed to a $2.5 million Series A round that Selecta closed quietly last May—and new investors NanoDimension, a venture firm with offices in California and Switzerland, and Timothy Springer, a professor of pathology at Harvard Medical School. (Springer was a founder of cancer-drug developer Leukosite, which was aquired by Cambridge, MA-based biotech heavyweight Millennium in a deal valued at $635 million in 1999.) Selecta’s technology was licensed from the labs of founders Bob Langer, an inventor at MIT, and physician-scientists Omid Farokhzad and Ulrich von Andrian, both of Harvard Medical School.
Drugs that enhance the immune system, such as widely prescribed antibody drugs and vaccines, have been around for years. But the tiny size and engineering of Selecta’s drugs could make vaccines more potent at relatively low doses and while reducing chances of side effects, the firm says. The company can design its drugs—which are made of biodegradable polymers attached to antigens and other components—to target specific immune cells and trigger immune responses that either fight or prevent illnesses.
Selecta says that its drugs could be used to treat a wide variety of illness, including infections, inflammation, allergies, cancer, and cardiovascular disease. Yet the firm, which expects to begin human testing in 2010, isn’t saying which specific uses of its drugs it plans to develop first.
“In many ways as antibodies became an important class of drugs, this is going to be a new and important class of drugs,” says co-founder Farokhzad, a scientific advisor and director of Selecta. His lab at Brigham and Women’s Hospital in Boston has done research on how to use nanoparticles to treat diseases such as cancer. He previously teamed with Langer, in whose lab he did part of his post-doctoral research, to found Cambridge, MA-based biotech startup BIND Biosciences. BIND is developing nanoparticle drugs for cancer and cardiovascular disease, and the firm also shares with Selecta common investors—Flagship, Polaris, and NanoDimension.
Selecta, naturally, has recruited people with expertise on the immune system. The firm has tapped Robert Bratzler (who went to grad school at MIT with Langer) to be its executive chairman. Bratzler was previously the long-time CEO of Wellesley, MA-based Coley Pharmaceutical Group, a developer of drugs that target immune-system proteins that detect bugs and activate the body’s natural defenses. Drug giant Pfizer acquired Coley in late 2007 for $164 million.
The immune system expert inside Selecta is co-founder von Andrian, who co-chairs its scientific advisory board with Langer (an Xconomist). Andrian’s lab performs so-called intravital microscopy that allows researchers to view immune system activity in living animals. This shows at the molecular level how viruses and other nanoparticles are handled in the body. Selecta uses the discoveries made in von Andrian’s lab to design its nanoparticle drugs to target specific immune cells, Bratzler says. The firm has also recruited Lloyd Johnston, a former vice president of operations at Cambridge, MA-based biotech firm Alkermes (NASDAQ:ALKS), to head research and development of its drugs.
Selecta says that the valuation of the company increased between the first round of financing and the December 2008 closing of the Series B round—an indication that investors believe the firm’s new approach to treating immune diseases could pay off.
“In this economic environment,” Farokhzad says, “our success in raising capital from top notch investors is a wonderful validation of Selecta’s team and technology.”
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