Forma Therapeutics Snags $25.5M Venture Round, Punctuating Startup’s Breakout Year

12/1/09Follow @xconomy

Anybody drawing up a list of New England’s biotech companies that really broke through in 2009 would have to consider Forma Therapeutics. The Cambridge, MA-based startup has nailed down a $25.5 million Series B venture round, which means it has now raised a total of more than $50 million this year to support what it hopes will be an efficient new engine for discovering new drugs.

The second-round investment was led by a new backer, Lilly Ventures, and it included a pair of existing investors: the Novartis Option Fund and Bio One Capital of Singapore. Lexington, MA-based Cubist Pharmaceuticals (NASDAQ: CBST), a partner of Forma’s, also became a new equity investor by converting some debt it had previously extended to the smaller company.

We first wrote about Forma in January, when Ryan had the story about how its founders, a group of scientists from the Broad Institute of MIT and Harvard, raised $25 million in their first big financing. The company has been on a tear ever since, more than doubling in size to 85 employees, adding research sites in Connecticut and Singapore, clinching five partnerships with organizations interested in its drug discovery engine, and now raking in this latest venture round. The $50 million figure I cited in the first paragraph is actually a bit of an underestimate, because Forma has brought in even more cash from its partners, which isn’t being disclosed.

“It does feel good,” says Steven Tregay, Forma’s CEO. “It’s been a productive year.”

What Forma has that’s different, and which other companies and organizations want a piece of, is its method for discovering drugs against cancer, infections, and potentially a number of other diseases. Forma focuses particularly (though not exclusively) on developing drugs that aim for protein targets that have traditionally eluded the pharmaceutical industry, Tregay says.

The first piece of the system is a screening technology that allows Forma to look at how proteins interact, not just in the isolation of a lab dish, but in the broader and vastly more complicated context of the whole cell, Tregay says. The second element is based on computing models that look for the “hotspots” or binding pockets, on the protein of interest, to see just how realistic it is to make a drug against that target. Based on that information, Forma, has been building up a portfolio of novel compounds that can hit the targets, both to stock its own internal pipeline and for its partners, Tregay says.

If this sort of technology can be proven to raise the odds of success in drug development, in which currently only one out of 10 drugs entering clinical trials is good enough to become an FDA approved product, the benefit would be obvious. Forma has no drugs that have yet entered that tough proving ground, but its roster of partners apparently like the company’s chances. Forma now has two separate deals in place with Novartis, one with Cubist, another with the Leukemia and Lymphoma Society, and one more with the Experimental Therapeutics Centre of Singapore.

While the capital markets have been tough this year, Tregay says he’s still finding partners who are hungry to get better at drug discovery. “If one has a differentiated platform, there are still lots of opportunities out there,” Tregay says. “It’s exciting.” He didn’t offer up much in the way of specifics about where Forma is really going strategically from here, though.

What Tregay would say about Forma’s future is that the new financing should ensure that the company has enough cash to operate at least through 2011 and probably longer, Tregay says. Forma isn’t planning to do much additional hiring because it has already built up much of the in-house skill it believes it needs to be fast and productive, he says. And with the new money, the company will be able to continue to invest in building up its internal pipeline of drug candidates, rather than relying entirely on doing work for partners.

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