Acelyrin Inc. has raised $300 million in a Series C round to accelerate its treatments for inflammatory diseases. The mid-September round follows a Series B round in November in which Acelyrin raised $250 million – meaning the small Valley company has raised more than half a billion dollars in less than a year.
The company’s drug in development is called Izokibep, designed to overcome the limitations of monoclonal antibodies. The company will be going up against the likes of Swedish firm Novartis and Eli Lilly and Co., both of which have competing treatments on the market. Acelyrin will use the funding to continue the development of Izokibep and invigorate its portfolio expansion.
The company is incorporated in Woodland Hills but for now maintains remote operations. There are plans for a brick-and-mortar headquarters location in the Los Angeles area that it hopes to occupy by next year.
In May, the company revealed data from a Phase 2 trial of Izokibep in 135 patients with psoriatic arthritis. It showed that the treatment was at the top end of efficacy over standard care and was well tolerated by patients.
The firm plans to move the drug into Phase 3 trials – which has the most experimental patients – for both psoriatic arthritis, a disease that causes skin patches and scales, and axial spondyloarthritis, swelling in the spine and joints that connect the spine to the pelvis.
More than 300 patients have received the treatment, many of them for as long as 3 years.
Arthritis market
The new round of financing is expected to last until the company’s likely submission of a biologic-license application for Izokibep.
Shao-Lee Lin, co-founder and chief executive of Acelyrin, told the Business Journal that the market to treat arthritis is worth about $8 billion worldwide. That market is expected to skyrocket to $14 billion by 2027.
“We can create value for patients and shareholders by accelerating the Phase 3 trials,” said Lin.
She noted that the treatment made patients feel better, which improved multiple areas of the users’ quality of life. Improvements in joint pain and skin conditions caused by inflammation was one of the major advantages of the drug.
“Top-end efficacy demonstrated in arthritis and psoriasis, coupled with differentiated resolution of enthesitis, was correlated with clinically meaningful improvements in patients’ quality of life,” said Lin. “These results led us to accelerate planned Phase 3 development … creating significant value for patients through the potential for earlier access to Izokibep.”
Enthesitis is inflammation of tendons and ligaments and can cause joint pain and stiffness and affect mobility. The drug works because of its strong potency and small molecular size, reaching high drug exposure levels through a single subcutaneous injection — most monoclonal antibodies require IV administration to achieve similar results. The molecule’s small size — approximately a tenth the size of a monoclonal antibody — allows it to reach targeted tissues that may otherwise be inaccessible to the much larger monoclonal antibodies.
Acelyrin partnered with Affibody last year, paying the Swedish biotech firm $25 million to secure the rights to Izokibep in the United States, European Union and Japan. Affibody is eligible to receive as much as $280 million in milestone payments as the drug progresses toward approval by the Food and Drug Administration.
The company’s Series B and C rounds were led by Access Biotechnology and saw participation from Westlake Village BioPartners, based in Westlake Village; AyurMaya, an affiliated fund of Matrix Capital Management; Cowen Healthcare Investments; Decheng Capital, based in Menlo Park; Marshall Wace; OrbiMed; Samsara BioCapital, based in Palo Alto; Surveyor Capital; Tybourne Capital Management, based in San Francisco; and venBio Partners, also based in San Francisco.
“I have known Shao-Lee Lin for almost 20 years, first meeting when she worked for me at Amgen,” Sean Harper, founding managing partner of Westlake Village Biopartners, said. “Westlake was excited to set her up as a CEO in our ‘CEO First’ model of company creation. Shao-Lee led the growth and pipeline development at Horizon Therapeutics, and she has a track record of successfully developing breakthrough therapeutics.”
Acelyrin has not announced plans for an IPO, but the biotech industry has seen its share of ups and downs in the market as of late. Just over 100 biotech companies priced an IPO last year, a record number, and they raised $15 billion in combined funds. However, this year there have been fewer than 20 to price an offering date, and of those most have raised less than $40 million.
According to BioPharma Dive, a site that covers the biopharma industry, stock prices of newly public companies dropped dramatically late last yeaar amid a sector-wide downturn, turning investors off to biotech offerings. Many emerging biotechs are seeking more private funding rather than entering public markets.
But the recent IPO for Third Harmonic Bio has many in the biotech industry feeling encouraged. On Sept. 15, the allergy and inflammatory disease startup raised $185 million, selling 10.9 million shares for $17 each. The IPO could indicate revived interest in the sector, although it’s unknown if Third Harmonic will maintain its value.
According to BioPharma Dive, more than half of biotechs to go public this year are trading below their offering price, as are 91 of the 104 that debuted last year The company’s stock is currently trading near its IPO price.
Looking ahead
The investors behind Acelyrin are signaling optimism about the company’s future.
“We anticipate Acelyrin to continue to push forward its key lead program into later-stage clinical development, to license in additional assets and to explore the possibility of accessing the public markets over the next year or so,” said Harper. Notably, Acelyrin will continue to grow its presence in the Los Angeles area, helping to drive forward the remarkable evolution of this biotech ecosystem and bringing high-quality jobs and technology to the region.”
Dan Becker, managing director at Access, will join Acelyrin’s board with the funding.
“The team at Acelyrin are world-leading drug developers, having previously brought to millions of patients several of the most successful and impactful immunology treatments available,” Becker said in a statement. “We are pleased to lead this round of financing to enable their growth in continuing to explore the potential of Izokibep in psoriatic arthritis, axial spondyloarthritis, hidradenitis suppurativa, uveitis and beyond.”