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Nimbus Nabs $65M to Advance In-House Drug Discoveries to the Clinic

Xconomy Boston — 

Nimbus Therapeutics’ drugs have already found new homes with larger companies that aim to develop them into potential treatments for autoimmune and liver diseases. Selling its discoveries was a goal for Nimbus from its inception. But the Cambridge, MA, biotech has also been trying to forge its own identity framed around discoveries that it keeps for itself. The startup’s executives hope to take some of those compounds into clinical trials within the next few years, and it now has $65 million to finance that work.

“We are trying to build a bona fide therapeutics company here and the only way we’re going to do that is by picking the right targets and developing them ourselves,” says Nimbus CEO Don Nicholson (pictured above).

Two years ago, Nimbus was considering an IPO as a way of financing its work, Nicholson says. At that time, the market for biotech IPOs was not as strong as it is now. So the company turned to reaching deals with larger companies as a way to find cash, he says. In 2016, Gilead Sciences (NASDAQ: GILD) of Foster City, CA, paid $400 million up front to acquire a Nimbus subsidiary whose drug was developed as a potential treatment for nonalcoholic steatohepatitis, a liver disorder. The compound is now in mid-stage clinical studies. Depending on the drug’s progress, Nimbus stands to gain up to $800 million in milestone payments.

Nimbus has since struck up partnerships with other companies. A Monsanto (NYSE: MON) alliance is pursuing fungicides. Deals with Genentech and Celgene (NASDAQ: CELG) are focused on developing treatments in immunology and oncology. Nimbus has two programs partnered with Summit, NJ-based Celgene. The tyrosine kinase 2 (Tyk 2) program is developing drugs for both immunology and oncology. A second drug program, a stimulator of interferon genes (STING), is focused only on immunology. The latter is developing small molecule drugs meant to block the role of this pathway in turning on the innate immune system. This approach could offer a way of treating lupus and other autoimmune diseases.

But Nimbus retains the right to develop drugs that activate the STING pathway, an approach that other companies have since taken up as a potential way to treat cancer. Activating STING may also have applications in virology. A potential Nimbus STING cancer immunotherapy is in preclinical development. The company is looking for a partner for that compound.

Nicholson says Nimbus will also keep some of its other drug discoveries, too. He won’t disclose what those drugs will target, other than to say that they will be treatments for oncology, immunology, and metabolic disease.

Nimbus was founded in 2009 as Nimbus Discovery. The company uses chemical-simulation software from Schrodinger, a New York-based software firm that is also a Nimbus investor. Schödinger’s software helps scientists understand how drugs bind to disease targets, which in turn helps them design drugs for those targets.

From the outset, Nimbus was formed as a limited liability corporation, which allows the company to set up individual subsidiaries for each drug program, Nicholson says. That business structure allows Nimbus to more easily sell a drug program and get a return on investment for the company’s financial backers. As Nimbus developed its drug programs, the vision of the company evolved. Nicholson now says Nimbus aims to find partners for half of its drug programs, while keeping the other half of its discoveries in-house. As the company finds drug partners, the cash from those deals will be able to give investors a financial return, while also providing the company working capital to continue R&D.

The $65 million financing for Nimbus was made by earlier investors in the company, including Atlas Venture, SR One, Lilly Ventures, Bill Gates, Pfizer Venture Investments, Lightstone Ventures, and Schrödinger. Nicholson says Nimbus will use the latest financing to advance its in-house compounds toward clinical studies, which could start in the next two to three years. At that point, with the company preparing for more expensive mid-stage clinical testing, Nimbus could revisit its IPO plans, he adds.

Photo by Jon Chomitz Photography