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With $43M, Nimbus Sheds “Discovery” Tag, Heads to First Clinical Test

Xconomy Boston — 

It’s always a big moment when a biotech makes the turn from lab experiments to real clinical testing. A startup from Cambridge, MA, is celebrating that turn with a name change, a shift in strategy, and a $43 million round of financing from three pharmaceutical companies.

That startup is Nimbus Discovery, formed to use computer software to discover drugs, as its original name suggested. As of today, however, it’s Nimbus Therapeutics. It’s using the $43 million B round to move its lead drug program, for an increasingly common liver disorder known as nonalcoholic steatohepatitis (NASH), into its first clinical trial.

The name change is emblematic of a big strategic shift for Nimbus. When it was first formed in 2009 with funding from Atlas Venture, Schrodinger, and Bill Gates, the company was structured as a limited liability company, or LLC—basically a holding company. That would make it easy to sell off individual drug candidates to buyers only interested in a single program. A few other New England biotechs, like Adimab and Forma Therapeutics, have done this as well; these structures were good ways for VCs to generate quicker exits and shareholder returns in biotech during the capital crunch when the IPO window was slammed shut.

Likewise, Nimbus aimed to discover new drugs, find buyers for them, and reap the financial rewards.

“It was an experiment of sorts,” says CEO Don Nicholson (pictured above, photo courtesy of Jon Chomitz Photography). “And the experiment has gone in a very favorable way. But not the way it was originally designed.”

Indeed, times have changed. Money has flooded into biotech over the past few years, IPOs have become an option again, and in Nimbus’s case, it liked what it was seeing from its own in-house programs. It didn’t want to just sell or partner those drugs off before generating potentially valuable data. So Nimbus, after several years without a chief executive (executive chairman Dan Lynch was running it), hired former Merck executive Nicholson as CEO in September, and it started thinking of itself as a therapeutics company, not just a discovery team for hire. The company, for instance, isn’t looking for a partner for its lead drug right now.

“It became fairly obvious to us that the company could do a lot better if it held onto some of those assets and started progressing them into the clinic itself,” Nicholson says.

Nimbus has not ditched the LLC structure, which still gives the company dealmaking flexibility. It can to do a typical licensing deal for an upfront payment and milestones, or fashion a prenegotiated buyout for a single program, as it has done through a deal with Monsanto, Nicholson says.

The difference is Nimbus will now develop its own drugs, rather than depending on “high throughput partnering on very early programs,” as Nicholson says. It’ll use its Series B cash to bring the NASH drug through Phase 1 trials on its own. The goal is to get the drug into Phase 2 testing in “very early” 2016, Nicholson says.

Nimbus was formed via a strategic partnership with Schrodinger, a developer of computational drug-discovery tools. Nimbus was given exclusive rights to harness that technology, which is meant to help scientists understand how drugs bind to specific molecular targets and quickly and efficiently screen through millions of molecules that might work on those targets. The hope is by using this technology, Nimbus could discover and design drugs to get to targets that traditional chemistry approaches have not been able to crack.

One of those targets is what’s known as Acetyl CoA Carboxylase, or ACC. It’s an enzyme that regulates the creation of fatty acids, and thus is implicated in a number of important metabolic functions such as blood sugar regulation and fat buildup. It could be useful for … Next Page »

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