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VelosBio Emerges with $58M in Funding to Steer Cancer Drugs to Clinic
October 1, 2018

Xconomy San Diego — VelosBio, a biotech startup researching new cancer drugs, has raised $58 million in financing.

The new VelosBio cash, a Series A round of financing, was led by Arix Bioscience (LSE: ARIX) and Sofinnova Ventures.

VelosBio joined Johnson & Johnson’s JLABS @ San Diego incubator in January. The company is developing antibody drug conjugates, a class of cancer drugs that link antibodies to potent cancer-fighting toxins. These drugs are meant to provide a targeted strike to tumors, sparing healthy tissue. The new VelosBio cash is earmarked for completing the work needed to proceed into human studies. The specific cancers that VelosBio aims to treat weren’t disclosed.

There are other companies that have antibody drug conjugate therapies in their drug pipelines and portfolios. The Seattle Genetics (NASDAQ: SGEN) drug brentuximab vedotin (Adcetris) is approved to treat classical Hodgkin lymphoma. On Monday, the company and partner Takeda Pharmaceutical released encouraging preliminary Phase 3 results testing that drug in peripheral T-cell lymphoma.

VelosBio is led by CEO Dave Johnson, the former chief executive of Acerta Pharma, which was acquired by AstraZeneca (NYSE: AZN) in 2015 for $2.5 billion up front. Last year, Acerta’s drug acalabrutinib (Calquence) won FDA approval as a treatment for a form of lymphoma.

Arix said that other investors in the VelosBio financing included Pappas Ventures and Chiesi Ventures, as well as earlier backers Takeda Ventures and Decheng Capital. Arix said it committed $11 million for an 11.2 percent stake in VelosBio.

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