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Gates Foundation Leads $45.5M Round for Gerngross’s Biotech Arsanis

Xconomy Boston — 

[Corrected 4/27/17, 11:57 p.m. See Below.] Arsanis, a Waltham, MA-based biotech co-founded by scientist and entrepreneur Tillman Gerngross to develop treatments for bacterial and viral infections, has raised a $45.5 million investment led by the Bill & Melinda Gates Foundation to finance a mid-stage clinical trial for its lead drug program.

The Series D round of funding will pay for Arsanis’ Phase 2 trial for its lead drug, ASN100, a combination of two monoclonal antibodies that aim to prevent Staphylococcus aureus pneumonia, a potentially life-threatening illness caused by a strain of what’s commonly known as a staph infection. The condition is often treated with antibiotics. [Corrected to note that ASN100 is aiming to prevent pneumonia.]

Arsanis plans to study patients who are on mechanical ventilation and have a high level of the Staphylococcus aureus bacteria, which can lead to pneumonia. The drug’s aim is to disarm the pathogen and avoid the development of the condition, CEO Rene Russo wrote in an e-mail. (The e-mail was relayed by an Arsanis spokeswoman.) Arsanis is comparing a single dose of ASN100 to a placebo in its global Phase 2 trial and expects results in 2018, the company says. There are no therapies currently indicated for prevention, Russo wrote. [Paragraph updated with comments from Arsanis CEO.]

Other new investors in the round include GV (formerly Google Ventures, the investment arm of the Internet giant) and Alexandria Venture Investments. Earlier investors OrbiMed, Polaris Venture Partners, SV Health Investors, NeoMed, EMBL Ventures, and the Anna Maria and Stephen Kellen Foundation also contributed. With the new round, Arsanis has raised about $90.5 million in equity funding and another $4 million in debt financing, according to regulatory filings.

Gerngross, who co-founded Arsanis in 2010, got his start as an assistant professor of biochemical engineering at Dartmouth College in 1998 before forming two life sciences companies, GlycoFi and Adimab. GlycoFi, which had a technology for producing protein drugs in yeast, sold to Merck (NYSE:MRK) for $400 million in 2006. Lebanon, NH-based Adimab developed an antibody discovery technology, and Arsanis spun out of Adimab to apply the technology to viral and bacterial infections. His most recent company, Avitide, raised a $7.6 million Series C round in 2015.

Arsanis says it will use some of the money to research neonatal S. aureus sepsis, an infection it says disproportionately affects newborns in developing countries. The company also plans to use the funding to research other monoclonal antibodies for other bacterial and viral infections, including multi-drug resistant Escherichia coli and Klebsiella pneumoniae, Streptococcus pneumoniae, and RSV, according to a prepared statement. The Gates Foundation has the option to provide funding to two additional drug programs that would focus on global health, according to the statement.