East Coast Biotech Roundup: Bristol-Myers, Syros, On-Q-ity, Ziopharm
The Boston-area biotechnology cluster got a shot in the arm this week when a drug giant announced a major expansion. East Coast startups raised millions, or folded, or regrouped after significant setbacks. Venture firms still showed an appetite for health care in the first quarter, and East Coast VCs grabbed top spots in the rankings.
—New York-based Bristol-Myers Squibb (NYSE: BMY) said Thursday it will spend $250 million to expand its biologics manufacturing facility in Devens, MA, where as many as 350 new employees will be hired at the 89-acre campus by the end of 2016. The construction will add two buildings with 200,000 square feet of laboratory and office space to the Devens complex of six major buildings, where the active drug ingredient for the rheumatoid arthritis drug abatacept (Orencia) is made. The expansion augments a coup scored by the state of Massachusetts in 2009, when Bristol-Myers completed its $750 million site at Devens for manufacturing of the biologic medicines that re-positioned the drug giant as a maker of biopharmaceuticals. That initial building project at Devens was the company’s largest capital investment to date. The addtional buildings are scheduled for completion in 2015.
—Watertown, MA-based startup Syros Pharmaceuticals announced Thursday it has raised $30 million in a Series A financing—a striking sum for a nine-employee company that began operations in December. Syros is mining for drug targets among a group of proteins it calls “super-enhancers,” which control the expression of genes. The company is building on research by its co-founders from the Whitehead Institute and MIT; Harvard Medical School, the Dana-Farber Cancer Institute, and the Broad Institute. Its board includes Nobel laureate Phil Sharp of MIT, and its CEO is Nancy Simonian, former chief medical officer of Cambridge, MA-based Millennium Pharmaceuticals. The financing was led by Arch Venture Partners and Flagship Ventures.
—Waltham, MA-based On-Q-ity, once a hot prospect among diagnostics startups, is selling off the last of its assets as it completes a shutdown, Atlas Venture partner Bruce Booth reported Wednesday on his LifeSciVC blog. On-Q-ity had raised a hefty $26 million Series A in 2009, from Atlas and other firms, when its primary focus was in cancer biomarkers. But after some disappointments on that side, it concentrated on developing its system to test for tumor cells circulating in the blood of cancer patients, raising another $5 million last year. That shift from the near-commercial stage biomarker product back to the “research-phase” tumor cell project would have eaten up more capital, however, and the company ran out of money, Booth said in an instructive post-mortem post. “My first total write-off in nine years of venture capital,” Booth wrote.
—New York-based Ziopharm Oncology (NASDAQ: ZIOP) is trying to bring off a shift in focus somewhat like On-Q-ity’s. After it announced disappointing late-stage clinical trial results for its lead drug candidate, palifosfamide, on March 26, Ziopharm devoted all its resources to its second program, an experimental cancer therapy based on synthetic biology. To conserve cash to support that program, Ziopharm let go about half its workforce this month and is reassessing its leases of office space in New York and at the Boston Navy Yard complex in Charlestown, MA. Ziopharm’s new focus—a DNA-based treatment to boost the immune response to cancer, is in Phase 2 trials. Some positive preclinical study results on the drug gave the company’s shares a lift this week. But the share price is still down more than 65 percent from its $5.13 close on March 25, before the bad news broke on palifosfamide.
—Three Boston-area venture capital firms grabbed the top three spots in nationwide VC fundraising in first quarter of this year, with the biotechnology-focused firm Third Rock Ventures capturing the number two place by scoring $516 million, according to a report this week by Thomson Reuters and the National Venture Capital Association. That said, the nearly $4.1 billion raised by 35 venture funds shows a contraction compared with the first quarter of 2012, when 53 funds raised about $4.7 billion. VC investment deals rose compared with the first quarter of last year, however. Research firm CB Insights says VC firms committed a total of $6.9 billion to 841 deals nationwide. New York companies, which netted 100 of those deals, pulled ahead of Massachusetts’ 75 deals to take the number two spot among the states, with both following well behind California’s 346 deals. Nationwide, healthcare commanded about 21 percent of the dollars invested, and 17 percent of the deals done.
—New York-based incubator Blueprint Health showcased 11 healthcare startups as it graduated the third group of companies to participate in its accelerator program for entrepreneurs. Blueprint’s demo day featured ideas for improving efficiency and communication at hospitals, and a dashboard that independent pharmacies can use to help their customers choose their Medicare plans. One startup, Evoncea, tracks the preferences of healthcare consumers at the neighborhood zip code level for services such as prenatal care. Blueprint, which aims to attract healthcare talent to New York, recruited its latest startup class from San Francisco, Boston, Philadelphia, New York, and other U.S. cities, as well as Britain.