Privately held Cerevance Inc., of Boston, raised $45 million in a series B designed to propel the discovery and development of therapies for treating CNS diseases such as Alzheimer’s disease.
Brad Margus, Cerevance’s CEO, has plenty of fundraising experience having been co-founder and CEO of Perlegen Sciences, which analyzed genetic variation, and also of Jupiter, Fla.-based Envoy Therapeutics Inc., which Takeda Pharmaceutical Co. Ltd. ended up buying in November 2012.
Margus said a key to fundraising is doing homework carefully to see who’s investing in the space, who has done similar deals and who has funds available. Putting investors through those filters results in a list of firms that could be essential partners.
“I wanted people who appreciated the platform and that are not pursuing the same targets as others,” Margus told BioWorld. “In the in early days, I’d give a whole talk before I realized it’s not a good fit. Now it’s different. I’ve learned if we’re wasting time on both sides.”
The financing was led by three new investors to the company – GV, Bill Gates and Foresite Capital – plus all the company’s previous investors, including Takeda, Lightstone Ventures and the Dementia Discovery Fund, which is managed by SV Health Investors.
COVID-19 is the world’s focus right now and that made the fundraising challenging, Margus said, but he added that he’s grateful to close the financing because “you can’t forget that millions will continue to get Alzheimer’s and dementia.”
Cerevance is already in the clinic, initiating a phase II trial in early December for its small-molecule oral brain-penetrant candidate, CVN-424, to treat patients with Parkinson’s disease and motor fluctuations who are currently being treated with levodopa. CVN-424 acts on a non-dopaminergic target protein in dopamine receptor D2-expressing medium spiny neurons in the basal ganglia’s indirect pathway. The compound modulates the D2-dependent indirect pathway but not the D1-dependent direct pathway. That selective targeting is designed to avoid side effects such as dyskinesia associated with dopaminergic therapies. Nearly a year ago, Cerevance completed its phase I study of CVN-424 by hitting its primary endpoint of safety in healthy volunteers.
“The platform allows us to profile gene expression, or epigenetics,” Margus said. “We can do it in specific cell types in brain tissue. Rather than look at stem cells in a lab or at mouse tissue, we’re working with brain banks. We have more than 7,000 samples from donors who are healthy from age 8 to 97 so we can see how aging affects different cell types.”
The profiling helps Cerevance determine why only certain cell types are affected and vulnerable to certain diseases. One symptom is an out of control inflammatory response, and the company is researching how to modulate or dampen inflammation in a cell type.
“We pointed the platform at diseases we think are important and we began to acquire tissue samples,” Margus said.
The company is still relatively small but the new financing will change that somewhat.
“We strive to have a nimble culture, with a sense of urgency,” he said. “We have 34 people on board, that will include CROs and clinical development efforts. As the pipeline progresses, we’ll add more folks.”
Advancing new therapies will mean collaborating with global pharmaceutical companies. Margus said his talks with potential collaborators have already begun.
The first financing for the company began in December 2016 with a $36 million series A of equity and nondilutive capital investments from Lightstone and Takeda. In May 2017, the Dementia Discovery Fund kicked in an additional $5 million.
More than 20 years ago, Margus founded the A-T Children’s Project, a nonprofit orchestrating research on the rare genetic disease ataxia telangiectasia, which two of his sons have. The disease causes progressive loss of muscle control, cancer and immune system problems. BioWorld first talked to Margus about the disease and the project in 1997.