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Hunting for an IPO? Voyager Gets $60M From “Crossover” Backers

Xconomy Boston — 

[Updated, 11:19 am ET, see below] It’s been a big few months for Voyager Therapeutics. First, it landed a partnership with Genzyme, a deal that included a $65 million up front check for the gene therapy startup. Now it’s got $60 million more to play with, and an investor syndicate that’s starting to look like that of a publicly traded company.

Cambridge, MA-based Voyager said this morning it’s raised a $60 million Series B round led by Brookside Capital and Partner Fund Management. Wellington Management, Casdin Capital, and other unnamed “blue chip investment funds” participated in the round, which Voyager is using to move forward five clinical and preclinical gene therapy programs for a variety of neurological disorders.

Through the Series B, Voyager has brought in a group of “crossover” investors; firms that invest in both private and public companies. Their presence is typically a signal that a startup is either on the verge of going public, or at minimum considering an IPO. Earlier this month, for instance, aTyr Pharma of San Diego raised a $76 million round with crossover backers, and outlined plans to go public less than a week later.

In addition, several Third Rock Ventures startups (the Boston VC firm is Voyager’s founding investor) have put together rounds like this months before an IPO—among them Sage Therapeutics (NASDAQ: SAGE) and Blueprint Medicines.

“Voyager, with its strong management team and a product engine that can generate novel therapies for numerous CNS diseases and other disorders, is poised to become a key player in the gene therapy space,” said Daniel Krizek, a director at Brookside Capital, in a statement.

[Updated with comments from Voyager] A Voyager spokesperson confirmed in an e-mail to Xconomy this morning that Third Rock—the sole provider of Voyager’s $45 million Series A round last year—did not participate in the latest round. That decision, however, was apparently part of a strategy that will leave Voyager better positioned for a public offering. “We had an extremely high amount of interest in our Series B round, so we wanted to take the opportunity to diversify our shareholder base with high quality crossover healthcare investors who could help support a future potential IPO,” the spokesperson wrote.

The financing continues a quick upward ascent for Voyager, which was formed by Third Rock just 14 months ago. The idea behind Voyager is to use gene therapy and potentially certain micro RNA tools to either cure or reverse the effects of a broad range of neurological disorders. The company is building an in-house library of adeno-associated virus (AAV) vectors—a common tool for gene therapy delivery—aiming to either make its own therapies, or form deals with others. Voyager is led by former Eli Lilly R&D chief and Third Rock venture partner Steve Paul, who left the Boston firm in July to lead the company.

Voyager is going after neurological disorders like Parkinson’s disease, Friedreich’s ataxia, amyotrophic lateral sclerosis, and Huntington’s disease. Through a broad alliance with Genzyme in February, Voyager handed over non-U.S. rights to the prospective Parkinson’s, Freidreich’s, and Huntington’s therapies, while keeping full ownership of the ALS treatment. Only the Parkinson’s treatment is in human testing—a Phase 1b clinical trial. The other treatments are a couple of years away from their first trials, Paul said a few months ago.

In return, Voyager got a $65 million check and a $35 million equity investment from Genzyme, with the chance to earn another $745 million should it hit a variety of milestones. The alliance is similar in structure to the types of deals Genzyme and its parent, Sanofi, have cut with other biotechs like Alnylam Pharmaceuticals (NASDAQ: ALNY) and Regeneron Pharmaceuticals (NASDAQ: REGN)—alliances where the larger company takes a stake in the smaller company, the two work together on a variety of projects, and the little guy gets to stay independent and preserve some upside for itself going forward.

The Series B round, meanwhile, is also the latest boon for gene therapy. Just last week, Dutch firm UniQure (NASDAQ: QURE) scored a broad deal with Bristol-Myers Squibb (NYSE: BMY) to develop gene therapies for a variety of cardiovascular diseases—a major endorsement of the field’s resurgence by Big Pharma. A number of other startups in the space have either formed or gone public, like Spark Therapeutics (NASDAQ: ONCE), Audentes Therapeutics, and Dimension Therapeutics.

There are serious challenges ahead for Voyager, of course—it’s aiming to deliver gene therapies by injecting them directly into the spine or brain, which no company has ever done before successfully. But Voyager now has a partner, a financial runway, and a group of backers to help try to solve those problems.

“Our mission at Voyager is to become the leading AAV gene therapy company in the world and advance the field by developing breakthrough therapies for patients,” Paul said in a statement. “We established a solid foundation through our launch funding and the continued support from Third Rock. This new investment from such a high-quality investor group is reflective of our progress to date in building an outstanding team, best-in-class pipeline and product engine.”