Aileron Snags $40M From Quartet of Pharma Giants to Develop New Class of Drugs

6/8/09Follow @xconomy

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to operate through the end of 2011.

Long before it needs to turn to investors for another round, Aileron hopes to build on the interest it expects to generate from today’s announcement. Over the coming months, it hopes to have its work published in scientific journals and form a product development partnership, and it hopes to introduce its first drug into clinical trials in 2010, Yanchik says.

One of the most unusual elements of the Aileron strategy is to make all these Big Pharma players into equity investors. Since they are normally sharp-elbowed competitors, they don’t often co-invest like this (although several drug companies invested together in pre-competitive technologies at Boston-based Enlight Biosciences last summer). There was some “unease” about the investors all getting together to invest in one company, Yanchik says.

The deal was structured to treat all the venture arms of the Big Pharma companies like traditional venture investors who are focused on returns, and doesn’t give the parent companies a first crack at intellectual property or development rights to Aileron’s drugs, Yanchik says. Aileron wanted all those drugmakers on board as investors, partly to validate the technology, but largely because it makes it easy for the company to get introduced to global directors of R&D who can help move its programs further along in development, Yanchik says.

Aileron could have raked in as much as $55 million to $60 million in equity, but some investors were turned away so that earlier investors wouldn’t have their stakes diluted in value, Murray says. There was that much interest in the company for a number of reasons, Murray says. One is that some of the major pharma and biotech companies have also been able to replicate some of the experimental work published by the Aileron team, and have seen the potential for themselves, Murray says. The company has also shown an ability to keep its drugs stable in the bloodstream for as long as 20 hours, making convenient once-daily dosing possible, Murray says.

By their nature, stapled peptides can be made to bind snugly, and tightly, against some of the trickiest targets in biology—like the p53 tumor suppressor protein, the Wnt pathway, and the Notch signaling pathway, Murray says. They could also be made into “fast-follower” anemia drugs that stimulate production of oxygen-carrying red blood cells, like Amgen’s erythropoietin (Epogen), without violating that company’s patents, he says.

That may represent the potential, but as always, proof will take time to come by. Stapled peptides haven’t generated the same level of attention as RNA interference. More scientific papers are expected to stir up interest in the next 18 months, but even if that supports the concept, the company still hasn’t proven the idea works in clinical trials. Previously, some people in the industry have wondered why, if the technology is so hot, only Novartis and Apple Tree had invested in it.

Aileron has lined up a host of additional investors now and hopes to lay the remaining questions to rest in the months and years ahead, Murray says.

“Stapled peptides are not a household name yet, but they will be,” Murray says.

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