Friday, March 12, 2010

Genetix drug success prompts $35M funding, exec shakeup, hiring plans

By Julie M. Donnelly

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Genetix Pharmaceuticals Inc. has raised a venture round of $35 million dollars following the release of data showing that its drug target for a rare disease called Adrenoleukodystrophy (ALD) has halted the ailment in all three human cases. The disease was featured in the movie Lorenzo’s Oil and afflicts young boys around the age of 6, often killing them in just 5 or 6 years.

The venture round was led by new investor Third Rock Ventures and was joined by another new investor, Genzyme Ventures. Existing backers TVM, Forbion and Easton Capital also contributed to the round.

Nick Leschly, a partner at Third Rock Ventures, has joined the company as both a board member and the interim president while a permanent CEO is recruited. Current CEO Alfred Slanetz will depart the company, Leschly said.

Mitchell Finer, a 20-year veteran in gene therapy research, will join the company as the chief scientific officer. The company currently has 12 full-time employees and expects to employ 30 workers a year from now.

The Cambridge-based company is awaiting the go-ahead from the FDA to determine whether it will be able to go straight to Phase 3 trials at this point, both for the ALD drug target, and a potential treatment for another rare disease, called thalassemia. Both drug targets have orphan drug status, so the timeline to a potential approval will be accelerated, and trials will involve significantly fewer patients than trials for drug targets treating more common diseases.

Company officials said that the $35 million will be enough to bring the ALD drug target to market, and the release of the clinical data and the investment is likely to spur other collaborations with disease foundations and large pharmaceutical companies.

“The big boys of pharma are starting to pay attention because gene therapy is really going to take off as the next big treatment area,” Leschly said.

The treatment will likely have to be expensive in order to bring in significant revenue since the patient population is small — just one of 17,000 boys are diagnosed with the disease — and the treatment is given only once, unlike enzyme replacement therapies for other rare diseases, with must be given once a month.

“We think that if you find that non-incremental, breakthrough discovery that saves lives, then the economics will flow,” Leschly said. The company did not disclose how much the therapy might cost if it is approved.

Until now, the company had raised approximately $40 million. Genetix was originally launched in the early 1990s but significantly ramped up research activities in 2007.