Verastem, Rooted at MIT, Raises $32 Million and Adds ATV and Astellas to Slate of Investors
Boston-based oncology startup Verastem, which was founded by MIT biologists Robert Weinberg and Eric Lander, has raised $32 million in a Series B financing, the company announced today. Verastem is developing drugs that target cancer stem cells, and it previously raised $16 million from a group led by former Sirtris CEO Christoph Westphal’s Longwood Founders Fund.
Longwood joined this latest funding round, which was led by Advanced Technology Ventures (ATV) and Astellas Venture Management, with participation from the other existing investors, Bessemer Venture Partners, Cardinal Partners, and MPM Capital. Verastem will use the proceeds from the financing to support the development of its drug candidates, which the company is now in the process of selecting, with the goal of getting the first Verastem drug into clinical trials in 2012.
Verastem is focusing on finding treatments for “triple-negative” breast cancer—a form of the disease in which patients’ tumors lack the three key receptors associated with breast cancer that current drugs target: estrogen receptors, progesterone receptors, and human epidermal growth factor receptor 2 (HER2). “There are very limited therapeutic options for these patients and they have a poor prognosis,” says Verastem’s chief operating officer Robert Forrester, who spoke to Xconomy by phone this morning.
Targeting cancer stem cells is one of the hottest concepts in oncology research. Companies ranging from New York drug giant Pfizer (NYSE: PFE) to OncoMed of Redwood City, CA, are all working on drugs that target these stem cells, which tend to resist standard chemo treatments and have been implicated as a major cause of cancer relapse and ultimately death. The fascination with cancer stem cells is so high that tiny New York-based Stemline Therapeutics, another startup working on the concept, had a standing-room-only crowd at its recent presentation at the American Society of Clinical Oncology (ASCO) conference.
Verastem has attracted an impressive slate of investors. Advanced Technology Ventures, which has offices in Waltham, MA and Palo Alto, CA, has invested in biotech startups such as Acceleron, Hydra Biosciences, and Hypnion, the latter of which it sold to Eli Lilly (NYSE: LLY) in 2007.
Astellas Venture Management, the venture arm of the Japan-based pharmaceutical giant, has backed more than 25 companies via five funds. Forrester adds that Astellas recently acquired OSI Pharmaceuticals, which “has been very active in cancer stem cells over the years. Having them involved will be fabulous.”
Founding Verastem investor Longwood is notable for its pedigree. Its partners include Sirtris co-founder and former CEO Westphal and former business development head Michelle Dipp. Westphal has been involved in founding a number of notable biotech startups, including Alnylam Pharmaceuticals (NASDAQ: ALNY) and Momenta Pharmaceuticals (NASDAQ: MNTA), but he’s best known for his Sirtris gig, which culminated in its $720 million sale to GlaxoSmithKline (NYSE: GSK) in 2008. Both Dipp and Westphal are transitioning out of GSK to focus on Longwood.
Forrester says the combination of product development and financial expertise on Verastem’s newly enhanced team of investors will be vital for moving the company forward. “These are extremely well known and sophisticated biotech investors,” he says.