Glaxo’s SR One Injects Pharma Bucks into $22M Round for Constellation Pharma

6/2/10

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Longwood Founders Fund with fellow Sirtris alums Rich Aldrich and Michelle Dipp.

“[Westphal] was certainly an important catalyst in bringing this [investment in Constellation] to fruition,” Goldsmith said. “We worked with multiple members of the SR One team.”

Brian Gallagher, an SR One partner and a former head of corporate development at Sirtris, has taken an observer seat on Constellation’s board of directors. Gallagher is also based in the Boston area.

In addition to Westphal, Constellation lists other big names in biotech among its founders and investors. Mark Levin, the startup’s founding CEO, was previously chief executive of the Cambridge-based cancer drug developer Millennium Pharmaceuticals (which was acquired by the Japanese drug giant Takeda for $8.8 billion in April 2008.) The former Millennium boss co-founded Third Rock Ventures, a Boston venture firm focused on life sciences investments, which was a lead investor in Constellation’s $32 million Series A round.

Constellation hasn’t yet identified which specific cancers it aims to treat with its drugs, but Goldsmith gave me an overview of the firm’s drug-development timeline last September.

Goldsmith says that he aims to form a corporate partnership sometime in 2010 that would provide additional financial support to develop his firm’s drugs, which have not yet been tested in humans. Large drug companies have been a growing source of capital for biotechs like Constellation, which would agree to give up rights to certain products in its pipeline in exchanged for cash. SR One’s investment in Constellation is purely a financial one. That means that the parent company, Glaxo, doesn’t get any rights to develop the startup’s technology, only the possibility of generating an investment return like any other VC firm.

Epizyme, Constellation’s cross-town rival in the epigenetics field, is also hunting for its first corporate partnership. Earlier this year Epizyme recruited Jason Rhodes, a former executive at Alnylam, to help the firm forge new alliances with big drug companies. Like Constellation, Epizyme has already drawn investments from drug companies’ venture arms. Epizyme’s $40 million Series B financing included investments from Amgen Ventures and Astellas Venture Management, which make bets on biotech firms on behalf of the Thousand Oaks, CA-based biotech giant Amgen (NASDAQ:AMGN) and Japan-based Astellas Pharma.

We expect to hear about a lot of developments in epigenetics research from the American Society of Clinical Oncology (ASSCO) annual meeting in Chicago from June 4 through June 8. I’m scheduled to speak to a biotech CEO about one such development today, so you can expect to hear more about this burgeoning field soon on Xconomy.

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