Third Rock Ventures has made its name on the East Coast the past five years by betting big money on biotech startups with big ideas, when most other venture capitalists have turned gun-shy. Now it’s putting that same strategy to work in its first homegrown startup on the West Coast.
Today, the venture firm is announcing it has put $40.7 million to work in a Series A financing of Global Blood Therapeutics, the first official company hatched from the San Francisco office it opened in September 2010. The new South San Francisco-based company will be led by CEO Mark Goldsmith, a venture partner at Third Rock and former CEO of Cambridge, MA-based Constellation Pharmaceuticals.
The new company has enlisted many familiar names from around the Bay Area biotech community for its founding team. There are a couple other Third Rock guys, Charles Homcy and Craig Muir, and David Phillips, a key player at COR Therapeutics who worked closely with Homcy as they co-founded Portola Pharmaceuticals. The founding team also includes three scientists from UCSF—Matthew Jacboson, Andrej Sali, and Jack Taunton. All the business and science experience is coming together to see if it’s possible to combine various technologies to create oral small molecule drugs that alter the shape of certain blood proteins as a way of fighting severe genetic diseases.
Global Blood Therapeutics isn’t saying what all those diseases are, but one of them is sickle cell disease (aka sickle cell anemia) in which an estimated 100,000 patients in the U.S. lack an ability to effectively distribute oxygen through their tissues because of a single gene mutation that causes red blood cells to change from plump little discs into a ‘sickle’ shape. Today there is no drug for sickle cell disease that works on the underlying biology, to alter the shape of the cells to make them more effective at doing their job of carrying oxygen throughout the body.
“I’m very excited about this company, I think it has potential to be a pretty high impact company,” Goldsmith says. “It’s extremely well-founded and thought out.”
Third Rock, which has about $800 million under management in two venture funds, has made a number of other investments in biotech companies in the Bay Area, including Ablexis, CytomX Therapeutics, and Igenica. But Global Blood Therapeutics is the first one in which Third Rock has executed on its usual company formation template, in which it incubates stealth company ideas in house, runs them through a rigorous process to hit certain milestones, and then unveils them with a massive Series A investment. Third Rock gets to keep more of the equity ownership of a company over its lifespan this way, and the big financing enables management to focus more on executing on milestones in the early days, rather than spend too much time fundraising. Cambridge, MA-based Blueprint Medicines and Sage Therapeutics are a couple examples of this kind of approach.
Goldsmith isn’t saying what technical milestones the company has cleared to earn this kind of vote of confidence, and also isn’t saying what the near-term scientific goals are that the company needs to hit to keep going. But he did offer a basic description of the concept.
The company is being built on expertise in three main categories—computational chemistry, structural biology, and traditional medicinal chemistry. The UCSF team brings the computing chops, in which they design small molecule compounds that ought to fit in a certain binding pocket of a 3-D protein target, Goldsmith says. Brian Metcalf, the company’s acting chief scientist and a former executive vice president at Incyte (NASDAQ: INCY), brings experience in aspects of small-molecule drug screening and medicinal chemistry for designing molecules to have specific properties. And Global Blood Therapeutics is leaning on contract firms to help with structural biology, to get a vivid picture of the 3-D protein target of interest, in terms of what regions are suitable for small-molecule drug binding, and how the target might behave when hit.
The job of the founding team, which currently has eight employees, will be to “reduce these ideas to practice,” Goldsmith says. Assuming all those pieces come together swimmingly, Global Blood Therapeutics will have to start showing its drug candidates do something useful.
The story gets interesting here, literally because Third Rock isn’t doing brain surgery here, at least in the sense that it isn’t trying to help improve a single invasive medical procedure. By going after diseases of the blood—an easily accessible bodily fluid—the company’s scientists will be able to get fast, objective answers about whether their compounds do what they are supposed to do in animals and people, at the molecular level. And as the company moves on into clinical trials designed to deliver proof worthy of FDA approvals, Global Blood Therapeutics will have no trouble designing experiments to show clear correlations between a drug that performs a certain molecular task, which translates into something meaningful to patients—like being able to climb stairs, live an active life, or live a longer life.
“The way we treat patients, we like to see direct molecular effects on a patient,” Goldsmith says. “We can measure things frequently this way. It will facilitate preclinical studies, and clinical trials. Eventually we should be able to adjust and monitor therapy as needed. With sickle-cell disease, it offers a compelling biological target, a compelling disease with an unmet need, and a compelling clinical/regulatory strategy.”
Work on this strategy has been going on for almost two years within Third Rock, essentially since the West Coast office was formed in 2010, Goldsmith says. He stressed that Global Blood has its sights on a portfolio of genetic blood disorders, and that sickle-cell is just one example. The opportunity to bring the technologies together to produce multiple products is what helped this company earn its chance at successs. “This company has a lot of potential to have great impact, it’s the kind of company Third Rock likes to build,” Goldsmith says.