DUBLIN – Genespire Srl, a Milan-based startup led by gene therapy pioneer Luigi Naldini, is the third company to receive funding from Sofinnova Partners’ Italian €108 million (US$117.5 million) gene therapy fund, the Sofinnova Telethon Fund. Paris-based Sofinnova is not commenting publicly on the amount involved, but it has so far invested €25 million in three ventures over the past six months – it closed two of the deals during the present pandemic, Sofinnova managing partner Graziano Seghezzi told BioWorld.
Milan-based Genespire is not yet revealing its plans, but it is focused on developing gene therapy for rare genetic diseases, including primary immunodeficiencies and metabolic disease. The other two additions to the Sofinnova Telethon portfolio include Milan-based Epsilen Bio Srl, which is developing therapies that employ epigenetic silencing to switch off the expression of disease-related genes, and Milan-based Pincell Srl, a preclinical drug development firm focused on rare inflammatory skin disorders.The Sofinnova Telethon Fund is exclusively focused on Italy, but not entirely on gene therapy. It was created jointly by Sofinnova and The Telethon Foundation, a research charity focused on genetic disease that funds three institutes, The San Raffaele Telethon Institute for Gene Therapy (SR-Tiget) in Milan (of which Naldini is director), The Telethon Institute of Genetics and Medicine (Tigem) in Naples, and the Dulbecco Telethon Institute, a virtual institute that funds early career scientists working on genetic disease. Most of the fund’s deal flow comes from these entities. In all, it will complete about 15 deals over the next four years. “We expect to do more seed investments than series A investments,” Seghezzi said.
Italy has never developed a biotech sector that is commensurate with its research strengths. “If you look at the scientific opportunities in the country, it’s unbelievable,” Seghezzi said. It has long been one of Europe’s leaders in gene therapy – three of the first six gene therapies to gain approval originated in the country. The San Raffaele hospital, with which SR-Tiget is affiliated, has long been one of Europe’s leading clinical centers for gene therapy.
But the country’s competitive standing in the area is threatened by the more rapid progress made by firms in other countries, notably the U.S. and the U.K., which have better access to the large pools of capital needed to fund gene therapy companies.
In contrast to traditional drug development, much of gene therapy’s costs come at the front end, given the high levels of investment required in manufacturing. Some U.S. startups – such as Philadelphia-based Passage Bio Inc. – have raised as much in a single series A round as Sofinnova Telethon’s entire fund. Sofinnova Telethon’s successful investees will need to seek international investors as their financing needs grow. “I think Italy has some of it,” Seghezzi said. They will also have to be creative at building partnerships.
There are previous examples that can help that process. London-based Glaxosmithkline plc built its gene therapy pipeline through an alliance with SR-Tiget, which originally developed Strimvelis, the ex vivo gene therapy for severe combined immunodeficiency due to adenosine deaminase deficiency (ADA-SCID). It gained approval in Europe in 2016, and is now part of the portfolio at London-based Orchard Therapeutics plc, following the latter firm’s product and pipeline acquisition deal with GSK two years ago.
Sofinnova is also working to improve Italy’s biotech innovation ecosystem by supporting an accelerator, Biovelocita Srl, which it developed in collaboration with serial entrepreneurs Silvano Spinelli and Gabriella Camboni. It is currently involved with six projects, including four startups and two academic projects. The country’s greatest challenge is its lack of entrepreneurial and managerial experience in biotech. “We need to have another generation of management,” Seghezzi said. Government policies have, historically, not been innovation friendly, he said. There is some movement in this sphere, but basic issues, such as legal and institutional frameworks still need improvement, he said.
That Sofinnova was able to close deals in Italy during a nationwide lockdown is testament to the can-do spirit of everyone involved. Seghezzi, who is a native of Bergamo, which was at the epicenter of the Italian outbreak, said there is now a “light at the end of the tunnel”, even if it is “a long tunnel.” The macroeconomic impacts of the pandemic are still not fully understood. But the pandemic will dispel any thoughts that health care is not an investment priority. “In the long term, innovation will benefit, in my opinion,” Seghezzi said.