Going up against cancer is tough for anyone, but especially hard for startups when the economy takes a nose dive and cash is hard to come by.
Companies that have raised a round or two of venture capital financing face serious down rounds and dilution—if they can get capital at all.
But two cancer companies successfully raised venture dollars last week.
Aragon Pharmaceuticals, focused on treating hormone-resistant cancers, raised $8 million in a Series A round from
Clovis Oncology, which is developing anti-cancer agents, raised $145 million in its first institutional financing from
San Diego-based Aragon is focused on treating prostate and breast cancer. The two diseases accounted for more than 368,000 new cancer cases in 2008, according to data from the American Cancer Society.
“Homronal therapy has been one of the bedrocks of cancer treatment,” says Rick Klausner, managing partner at The Column Group. Some 30% of all cancers can be treated with hormone treatments, he says. Working with tumors that resist that treatment provides an opportunity for new drugs, he says.
The company was based on research developed by Memorial Sloan Kettering Cancer Center’s Charles Sawyers and UCLA’s Michael Jung. The two researchers determined that a new class of nuclear-receptor-targeting drugs might work where hormone therapy fails. Aragon Pharmaceuticals is working to commercialize that discovery.
Clovis Oncology is looking to buy six or seven drug candidates to commercialize, says investor Brian Atwood, a managing director at Versant Ventures. The company plans to spinout technology from big and medium-sized pharmaceuticals as well as universities and other startups. It will likely see hundreds of potential candidates, says Atwood.
Clovis’ $145 million round is likely to be the only venture money it takes, says Atwood.
A call from Clovis would likely be welcomed by any number of struggling startups or public companies that have seen their stock battered this year. But Atwood says the investment isn’t a recession-based investment.
The Clovis management team last worked together running a company called Pharmion, which similarly bought drug candidates. The company went public in 2003 and sold to Celgene Corp. in 2008 for $2.9 billion.
Not only is the management team reunited, but many of the investors have chipped in again as well. NEA, Versant, Domain and Aberdare invested in both companies.