[Update: 7:15 pm Eastern, 10/30/09] Cambridge, MA-based Cequent Pharmaceuticals, one of the many aspiring firms in the field of RNA interference drug technology, has raised $3.35 million in equity in the first tranche of a venture round that could be worth as much as $15 million, according to CEO Peter Parker. A regulatory filing released earlier today said the initial financing was worth $2.7 million.
Cequent has not formally announced the financing, although this is part of a second round of financing since Ampersand Ventures, Pappas Ventures, Yasuda, and Novartis Option Fund pumped in $15 million for a Series A round in 2007. The first tranche of equity, from inside investors, is worth $3.35 million, while a second tranche from that group is expected to be worth $3.15 million, Parker says. The new financing will also include a $3.5 million venture loan from Gold Hill Capital and Silicon Valley Bank, which will be used to help get Cequent’s lead drug candidate into clinical trials, Parker says. Cequent is also seeking capital from outside investors, which it expects to receive after the clinical trial starts, he says. [Updated comments from Parker at 7:15 pm Eastern, 10/30/09].
RNA interference, which is supposed to allow scientists to silence disease-causing genes in ways that traditional drugs can’t, has been one of the big ideas to emerge in the biotech and pharmaceutical fields this decade. Boston has more than its share of companies vying in the space, including the leader in the field, Alnylam Pharmaceuticals (NASDAQ: ALNY), as well as smaller upstarts like Worcester, MA-based RXi Pharmaceuticals (NASDAQ: RXII), Watertown, MA-based Dicerna Pharmaceuticals, and Norwood, MA-based AiRNA Pharmaceuticals.
The biggest challenge with RNAi is with delivering these drugs effectively, because in their pure form, they get broken down in a matter of minutes in the body before they can block the RNA target of interest. Cequent is attempting to tackle this problem, and differentiate itself from competitors, by pushing the first orally delivered RNAi drug into clinical trials for a rare condition called FAP, a type of gastrointestinal polyp that leads to colon cancer. Other drugs are given via injection with lipid nanoparticles to make them more stable in the blood, or through localized delivery such as aerosols.
The idea at Cequent is to deliver the RNAi with an engineered form of E. coli bacteria, which would be at home in the bacteria-rich environment of the colon and wouldn’t need to overcome the challenges of being absorbed into the bloodstream that injectable drugs have. In this case, the target it would need to hit is right there in the gut anyway. Cequent has said it expects to file an application to start its first clinical trial with this drug before the end of the year.
Cequent lists a seven-member board of directors, which includes two insiders—CEO Peter Parker and founder Chiang Li, who’s also the CEO of Boston Biomedical and an adjunct faculty member at Beth Israel Deaconess Medical Center in Boston. The outside directors include Herbert Hooper of Ampersand; Eric Linsley of Pappas Ventures; Lauren Silverman of Novartis Option Fund; Michael Taylor of Ensemble Discovery; and Thomas Hancock of New England Partners.