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One Week Into The New Year, Five Biotechs Reel in $220M Venture Cash

Xconomy National — 

Is everyone in biotech putting out news this week so they won’t be distracted from their partying next week at the J.P. Morgan healthcare conference in San Francisco?

That’s a joke, of course, but the news flow of the new year is serious enough to merit an extra round-up from us. We’ll still have our regular West Coast and East Coast roundups by the end of the week, but here are five financings we’re breaking out separately.

One theme: Lots of cash. Another theme: Not your traditional venture sources. Some of those sources are funds that typically invest on the public side but cross over into late private rounds for better positions come IPO time. Their presence makes the private companies they invest in candidates to go public sooner rather than later.

That, combined with the heavy IPO filing activity in December, suggests that the supply for fresh biotech issues will be there as long as the strong demand of the past two years continues.

—Aduro BioTech of Berkeley, CA, said Monday it has raised a $51 million Series D round from investors that include OrbiMed Advisors and a handful of “crossover” public investors such as Jennison Associates and Janus Capital Management—the kind that often signal a try for an IPO is coming soon. The cash helps Aduro push ahead with its cancer immunotherapy programs, one of which employs a highly unusual approach, as Xconomy San Francisco editor Bernadette Tansey explained in this story from last summer.

Many companies in the immunotherapy spotlight have made clinical gains with either checkpoint inhibitors—monoclonal antibodies to block proteins that put a check on the immune system—or genetically engineered T cells that become tumor killers.

Aduro is doing neither. It is modifying the bacterium Listeria monocytogenes, which has strong immune stimulation powers, to train the body to attack various types of tumors. Johnson & Johnson unit Janssen Biotech licensed Aduro’s prostate cancer treatment last summer and could pay as much as $365 million. J&J’s venture group is also an investor.

—Global Blood Therapeutics of South San Francisco, CA, announced Tuesday a $48 million Series B round. Like Aduro, Global Blood is bringing aboard investors who are often associated with a push toward going public. The round includes RA Capital, Deerfield Management, Wellington Management, one undisclosed “blue chip public investment fund,” and others.

The firm is going after sickle-cell disease, a genetic blood disorder with specific geographic origin. In the U.S., one in 500 African Americans are born with the disease because of their African descent, according to the National Institutes of Health. The company is starting a Phase 1/2 trial and could have meaningful data in the second half of 2015, according to CEO Ted Love.

—Seres Health, a Cambridge, MA, startup developing treatments for diseases driven by the trillions of microbes we host in and on our bodies, revealed Tuesday a $65 million investment from Nestlé Health Science. It’s a Series D round for Seres, which brings its total raised to more than $130 million. Its previous round, announced in December, brought on board public healthcare investors who remained anonymous.

CEO Roger Pomerantz told Xconomy last summer the company was working on IPO plans. Its lead product SER-109 is a mixture of bacterial spores that are meant to restore a healthy gut ecosystem in patients with recurring Clostridium difficile infection. C. difficile causes diarrhea that kills 14,000 people every year in the U.S. alone, with thousands more chronically debilitated. A Phase 3 trial should start soon.

—Surface Oncology of Cambridge, MA, announced today a $35 million Series A round led by Atlas Venture, Fidelity Biosciences, New Enterprise Associates, and Lilly Ventures. It’s probably safe to say Surface, seeded and incubated by Atlas, isn’t going public anytime soon, although a few biotechs during this window have displayed shocking launch-to-IPO velocity.

Surface wants to develop cancer immunotherapies, but like Aduro, it’s got different ideas than Juno Therapeutics (NASDAQ: JUNO), Novartis (NYSE: NVS), Bristol-Myers Squibb (NYSE: BMY), Amgen (NASDAQ: AMGN), and others that use either checkpoint inhibitors or genetically engineered T cells.

According to acting CEO Dave Grayzel, Surface also wants to go after solid tumor types—breast, ovarian, and colon cancer, for example—that haven’t responded well to other programs, with drugs that either act alone or in concert with some of the checkpoint inhibitors. Grayzel, who is an Atlas Venture partner, says Surface could have its first drug in the clinic in two years.

—CytomX Therapeutics said Tuesday it has pulled in a $20 million Series C round led by Pfizer’s venture arm. Corporate venture groups have played an ever larger role in biotech funding since the recession, but rarely do they lead a round.

Pfizer is no stranger to CytomX. Since 2013 it has been a development partner of the South San Francisco, CA-based drug developer, which has created a version of monoclonal antibodies it calls Probodies because they have “prodrug” qualities—that is, they are only activated under specific conditions.

CytomX has also inked deals with ImmunoGen and Bristol-Myers Squibb to develop Probody-drug conjugates and Probodies to target immunotherapy checkpoint targets. Returning investors Third Rock Ventures, Canaan Partners, and the Roche Venture Fund also joined the round.