Seattle-based Groove Biopharma has nailed down another $6 million in venture capital to continue its quest to create a class of drugs that work unlike anything else on the market today.
Groove, the microRNA drug developer founded at the Seattle-based Accelerator in 2008, has secured its Series B financing from the same investors who put $3.9 million into the company in April 2010. The group includes Alexandria Venture Investments, Arch Venture Partners, OVP Venture Partners, Versant Ventures, and WRF Capital. The money is expected to run through the end of 2012, as Groove looks to select its lead drug candidates that it believes can make it through the final preclinical studies needed before the FDA will allow clinical trials to begin.
The company, formerly known as Mirina, is attempting to stake out its position in one of the emerging fields of biology today—microRNA drug development. Groove is one of a handful of startups seeking to make drugs that can inhibit specific stretches of RNA that regulate how networks of proteins are expressed. While many drugs have had success aiming specifically for one specific disease-related protein, scientists are hopeful that by hitting master switches that control broad networks of proteins, they will have more success against complex diseases like diabetes, cancer, and autoimmune conditions.
Years of work will still need to be done before microRNA drugs can generating the kind of medical proof that can only come from large clinical trials. But startups like San Diego-based Regulus Therapeutics, Denmark-based Santaris Pharma, Boulder, CO-based Miragen Therapeutics, and Austin, TX-based Mirna Therapeutics are all looking for their edge in the microRNA drug development field. Groove’s contention is that it has an advantage with what chief scientist David McElligott calls “unexpected benefits in pharmacologic behavior.”
What that means is that Groove thinks its microRNA drugs can be delivered as liquid injections which circulate through the bloodstream, while still reaching the molecular target of interest in specific tissues. There’s no need to create special chemical delivery packages, like lipid nanoparticle capsules, which have made it difficult to efficiently deliver other RNA-based therapies.
“We don’t have to do anything extra to our molecules,” says Carl Weissman, the chairman and CEO of Accelerator. The financing, he says, shows that “this group of investors is very impressed with the progress of the technology, and realize it’s truly differentiated.”
Thong Le, a managing director with WRF Capital, said, “we’re excited about Groove and think the technology has proven to be compelling. The new funding is testament to our strong endorsement of the potential of the technology and the quality of the scientific/development team.”
So far, Groove has shown it can deliver its microRNA molecules both in the petri dish, and in different species of rodents, McElligott says.
That kind of progress in years past might have been enough for Groove Biopharma to raise a big Series B investment in the $20 million range, so that it could leave the nest of Accelerator and become a more independent company. But in an especially tough environment for biotech financing, the company is being kept on a tight leash, with just five full-time employees and a network of contractors doing much of the heavy lifting. Accelerator has sought to adapt to the new reality by housing companies for longer periods of time, and providing its usual business support while the entrepreneurs focus on hitting their scientific goals, Weissman says.
“The way financings are being done these days isn’t to throw tens of millions into a company and let them go. Things are meted out a bit more carefully,” Weissman says.
McElligott said he may do a little bit of hiring with the new financing in hand, but not much. “Our intent is to keep the company as lean as possible, as long as possible,” he says.
And as a self-described “notoriously conservative” scientist, McElligott showed that whatever venture capital validation he just got isn’t going to his head.
“So far, the technology has withstood everything we’ve thrown at it. It’s exceeded my own expectations,” McElligott says. “But you’re only as good as your next experiment.”