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Fresh Off $25M Raise, Generation Adds $100M For Next-Gen Gene Therapy

Xconomy Boston — 

Today marks another noteworthy moment in the continued advancement of gene therapy, which now has multiple products on the market after decades of research. Generation Bio, one of the startups trying to leapfrog existing versions of the technology, has now raised $125 million in two separate rounds in less than two months.

Cambridge, MA-based Generation is announcing a $100 million Series B round this morning, adding to the $25 million haul the company announced in early January.

The new raise funds an effort by Generation to broaden the reach of gene therapy, which despite its considerable progress has a few key limitations: developers can’t control the level of a gene therapy’s therapeutic effect, and can’t give a second dose if the first wears off.

The company raised its latest round so quickly because it will be growing rapidly in the next two years, transitioning into clinical studies, and trying to test its technology in a variety of different tissues, says CEO Geoffrey McDonough. “We would like to position the company to be able to select an appropriate time” to hold an IPO, he says.

After decades of ups and downs, there are multiple gene therapies now on the market in the U.S. and Europe, and several more likely on the way. These treatments shuttle DNA into the body, typically with the help of an engineered virus, to help produce a critical protein. Ideally just one dose would last a lifetime, but at this point gene therapy’s results are somewhat unpredictable. Developers still don’t know how much of a protein a gene therapy might produce in each patient, or how long the effect of the therapy will last. And some people aren’t eligible for gene therapy because of pre-existing antibodies that attack the viruses that deliver the treatment.

As Xconomy reported in January, Generation is part of an emerging crop of companies trying to solve some of these problems. It’s advancing a gene therapy approach that doesn’t involve the use of a virus. Generation stuffs a type of genetic material called closed ended DNA, or ceDNA into a lipid nanoparticle—a fat bubble commonly used to deliver drugs—and injects it into the body. The LNP dissolves once in the cytoplasm of a cell, and the ceDNA, on its own, heads to the nucleus to produce proteins. The hope is by using this approach, patients won’t develop antibodies against the treatment, and that Generation can better control protein expression by starting with a low dose and administering it again if needed.

The concept hasn’t been tested in humans, however; the latest round should get Generation through preclinical tests. Generation aims to start with rare, inherited liver diseases—possibly phenylketoneuria or progressive familial intrahepatic cholestasis, though the company hasn’t selected a lead candidate yet—before moving on to gene therapies targeting other tissues, like the eye or lungs. Generation hopes to have two programs selected within the next 18 months, McDonough says.

Fidelity Management & Research led the funding. Invus, Deerfield Management, Casdin Capital, Foresite Capital, and affiliates of Leerink Partners participated.

Here’s more on Generation’s approach, and some of the limitations of existing gene therapy methods.