Landos Biopharma announced Tuesday it raised an additional $60 million in its quest to achieve federal approval for new autoimmune disease medications.
This round builds on top of $10 million the startup raised in 2017, right before it began Phase I clinical trials of its primary drug in development, called BT-11.
“Our ultimate goal is to serve those patients with autoimmune disease with unmet needs,” Virginia Tech researcher and Landos Biopharma CEO Josep Bassaganya-Riera said. “And whatever it takes, we’ll do to accomplish that.”
Sam English, a local entrepreneur who recently studied the state of the region’s startup fundraising ecosystem, said this amount of capital is unusual.
Several local companies have raised funding rounds around $20 million in recent years. Roanoke County’s PixelOptics made a big splash when it raised $45 million to launch eyeglass technology in 2011.
English said it’s hard to compare fundraising from one startup era to the next, but anything above that high -water mark would rank among the region’s largest startup funding rounds in recent history.
Drug development is notoriously expensive, beginning in the lab and then progressing through years of clinical trials in order to receive approval from the Food and Drug Administration.
Bassaganya-Riera said the first $10 million Landos raised paid for Phase I clinical trials for BT-11, an oral treatment for ulcerative colitis and Crohn’s disease.
For that study, healthy volunteers received the drug in order to gauge whether it’s safe for humans.
Bassaganya-Riera said BT-11 checked all those boxes. And as a bonus, the results showed lowered fecal calprotectin levels, a biomarker widely viewed as an indication of effective treatment for the targeted ailments.
BT-11 works differently from other treatments for ulcerative colitis and Crohn’s disease because it’s administered orally, which means it wouldn’t require injections and hospital visits. Also, it stays confined to the gastrointestinal tract, which decreases the potential for side effects.
With the positive Phase I results in hand, Bassaganya-Riera said he hit the fundraising trail about four months ago.
New York life sciences investment firm Perceptive Advisors, which led the 2017 round, put in more money. New investors, including RTW Investments, Osage University Partners and PBM Capital, also took a bet on Landos.
The $60 million will primarily be used to pay for Phase II clinical trials. The first study will include 195 patients with ulcerative colitis across 46 sites in the U.S. and Europe. Later, they’ll do the same for people with Crohn’s disease.
Bassaganya-Riera said the funds will also help push Landos’ next drug in the hopper closer to its own clinical trials. That medication, called NX-13, is also an oral treatment for ulcerative colitis and Crohn’s disease.
Landos employs about 20 people at its Blacksburg headquarters and an outpost in Northern Virginia, combined. With the new funding and challenges ahead, Bassaganya-Riera said they’ll need more workers, from clinical project managers to scientific researchers.
Over the next couple years, he said the company could easily double in size.
Bassaganya-Riera has described an aggressive timeline for Landos since the day he launched the startup, and he has stuck to those plans so far.
If the Phase II trials go as he expects, the next step would be even bigger. That’s when Bassaganya-Riera said he would consider the possibility of an acquisition or potential initial public offering to carry the drug through the third and final phase of trials.
But that decision time won’t come until next year, at the earliest.
“My preferred approach would be going public, because that would allow us to support the Phase III studies, would allow us to further grow Landos into a robust, commercialization-ready biopharmaceutical company,” Bassaganya-Riera said.