Two more biotechs for GSK and venture capital portfolio

By Fiona BARRY

- Last updated on GMT

Two more biotechs for GSK and venture capital portfolio
GSK and venture capitalists Avalon have launched two early-stage R&D biotechs in San Diego, California.

Silarus Therapeutics and Thyritope Biosciences will each receive $10m (€8m) in a Series A financing round to investigate the hormone behind anaemia, and anautoimmune disease.

The two companies will be located in a “Community of Innovation​” (COI) with “a fully-equipped R&D infrastructure and industry mentors prepared to leverage their expertise​” set up by Avalon in San Diego for its portfolio companies.

According to their agreement, Avalon will provide Silarus and Thyritope with executive leadership and operational management. GSK has the option to acquire each of the firms upon identification of a clinical candidate. If it chooses not to, the companies will remain with Avalon and be free for other strategic transactions.

Silarus Therapeutics is to develop therapeutics targeting erythroferrone for iron deficiency and overload illnesses. Erythroferrone is a recently-discovered hormone that regulates the iron supply for red blood cell production. The company is based on intellectual property in-licensed from the University of California, Los Angeles.

Thyritope Biosciences will work on drugs to target the thyroid-stimulating auto-antibodies which cause hyperthyroidism and orbitopathy in Graves’ disease – an autoimmune disorder which produces excessive thyroid hormones.

The company will use molecular evolution technology developed by Patrick Daugherty in the departments of Chemical Engineering and Biomolecular Science and Engineering at the University of California, Santa Barbara and commercialized by Serimmune.

$495m fund

GSK and Avalon Ventures first announced their $495m alliance to found up to ten biotech start-ups in April 2013.

In November last year, they set up their first company, Sitari Pharmaceuticals, in the La Jolla neighbourhood of San Diego. Sitari is researching the Transglutaminase 2 (TG2) pathway multiple indications, focusing on coeliac disease.

At the same time, GSK established its first San Diego office of around 10 people as part of the alliance.

Avalon MD Jay Lichter said his company’s collaboration with GSK represents a new, disruptive model for early-stage drug discovery, combining “the nimble start-up mentality​” of a venture fund with the R&D resources of a pharma giant.

Lon Cardon, Senior Vice President, Alternative Discovery & Development at GSK, said the collaboration bridged the gap between capital, academia and big pharma.

From conception of the idea to three new companies in less than 18 months is an unprecedented pace for us.​”

Venture Capital interest

Venture capital firms are showing increasing interest in biopharmaceuticals, Mark Shapiro, Director of Clinical Solutions at contract research organisation Clinipace, told

From where we sit, we have seen private equity and venture capital starting to get very busy in the biotech space after several quiet years, so I think they are probably looking at those investments now as things that have higher risk, but higher potential returns in that five- to ten-year time frame. 

If I were a private equity investor right now, I’d be looking at biotech and small pharma companies as potential investments with a focus not on an eventual IPO [initial public offering] but rather on large pharma as my target acquirers.​”

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