Spero Emerges With $3M, Backing From Roche, and Plans to Disarm Bugs
There seems to be a new scare every week in the world of antibiotics, because bacteria have the frustrating habit of evolving and becoming immune to current treatments. Atlas Venture’s latest seedling startup, Spero Therapeutics, believes it has a new type of answer for those tough-to-kill bugs—one that’s caught the attention, and potential dollars, of Roche.
Cambridge, MA-based Spero is emerging from stealth today and is announcing it’s given Roche the option to acquire its lead program—a preclinical antibiotic that inhibits an unspecified target—at a prenegotiated price once the startup is ready to file an investigational new drug application with the FDA. Spero didn’t say how much that deal would net the company, but Roche is bankrolling its R&D costs in exchange for its exclusive buyout option, and would pay Spero an unspecified upfront payment and milestones if the buyer chooses to use it.
Spero was seeded by Atlas and the Partners Innovation Fund in April 2013, with Ankit Mahadevia, a venture partner at Atlas, taking on the head seat as acting president. Atlas, Partners Innovation Fund, and SR One (the VC arm of GlaxoSmithKline) then teamed up to provide the company with $3 million in Series A funding. Atlas’s Jean-Francois Formela, SR One’s Vikas Goyal, Partners Innovation Fund’s Reza Halse, and Achillion Pharmaceuticals CEO Milind Deshpande joined the board.
“We would’ve raised a lot more, but the Roche upfront really helps defray that budget quite a bit,” Mahadevia says.
It’s rare to see an antibiotics biotech startup these days, for a multitude of reasons. Mahadevia points, for example, to a historical lack of clarity around the the standards antibiotics must meet to gain FDA approval. Antibiotics also just don’t get the same type of pricing power that life-saving drugs for other diseases do. So much of the industry’s resources have shifted elsewhere—to drugs for treating cancer and cardiovascular disease, for example.
But Mahadevia says a few things are changing. First, the unmet need in antibiotics keeps getting “worse and worse.” The Centers for Disease Control said recently that 2 million Americans each year suffer from drug-resistant bacterial infections and more than 23,000 of them die. Second, in 2012, the U.S. Congress passed the Generating Antibiotic Incentives Now (GAIN) Act, an initiative to spur antibiotic R&D by offering an additional five years of market exclusivity and potentially shorter timelines to approval.
Pharma companies like Roche—which abandoned anti-infectives research more than a decade ago—have started making their way back to the table as a result. The Swiss pharma giant has cut deals with Cambridge, UK-based Discuva and Switzerland’s Polyphor in the past six months alone, and is now adding Spero to its list of partners.
“The halo effect of the GAIN Act has really gotten people excited again,” Mahadevia says. “I think it’s a good time to be back in.”
Time will tell if that’s true, of course, but at the very least, antibiotic startups are familiar territory for Atlas. The firm was an investor in Novexel, a privately held Paris-based startup that sold itself to AstraZeneca for up to $505 million in late 2009, generating a “nice outcome,” according to Mahadevia (it’s unclear how much Atlas put into Novexel).
With that, and the shifting industry factors in mind, Atlas decided to jump back into antibiotics once again. The firm homed in on work being done by … Next Page »