The $65 million that Hotspot Therapeutics Inc., of Boston, raised will help advance its lead programs to the clinic, including protein kinase C antagonists for Th2 and T-reg-driven autoimmune disease and S6 kinase antagonists for rare metabolic disease. The financing will also accelerate the discovery-stage pipeline targeting genetically validated transcription factors and E3 ligases, including CBL-B.

“Sitting on cash is a nice position to be in,” Jonathan Montagu, Hotspot’s CEO, told BioWorld. “We have more control over our destiny than otherwise. We’re pretty much on track and plan to be in the clinic shortly.”

The company targets regulatory hotspots, a family of allosteric sites used naturally to regulate protein function that could, in some cases, encourage a body’s natural responses to turning off inflammation.

“We unlock biology that was not accessible before to focus on natural regulatory mechanisms,” Montagu said. “If we can understand how nature controls a protein, we can get a small molecule to do the same.”

The molecules are extremely selective, Montagu said, as nature has refined them to be specific with certain proteins.

“We’re big fans of cell-based approaches,” he added. “The traditional approach has been to clone protein expressed in cells and purify them. That’s all good because you can control the system, but is that protein sitting in the test tube representative of the protein? Sometimes yes or sometimes no. We want to evaluate molecules in the cell. We have the technology to look at molecules in their natural environment to modify them directly. We do a lot of cell-based work in a natural setting.”

Hotspot’s lead targets are the first and only allosteric inhibitors targeting PKC-theta (protein kinase C), targeting patients with atopic dermatitis, psoriasis and some rare inflammatory diseases, and S6K (S6 kinase), a signaling node involved in regulating mitochondrial and metabolic function. One of them is likely to be the company’s candidate for the clinic. Montagu said the company will make its selection soon.

“With both we have the opportunity to generate important early data,” he said. “We can do studies in healthy volunteers to learn about the molecules.”

Last August, Hotspot acquired Macroceutics Inc., of Monmouth Junction, N.J., a provider of DNA-encoded library screening technologies. Montagu said the deal gave Hotspot “an in-house DNA-encoded library capability” to enhance Hotspot's platform, which is designed to predict, drug and differentiate unique regulatory hotspots on proteins. The technology enables millions of molecules to be rapidly synthesized and screened against a protein of interest by using three-dimensional structure insights from uncovered pockets.

The series B will also allow the company to grow. Montagu said Hotspot will double in size over the next two years, though COVID-19 is likely to slow the effort to fill a couple of C-suite positions, where face-to-face discussions are important. Waiting until August or September is the most likely course, Montagu said, before tackling those hires.

Hotspot is also looking to partner in the next 12 months or so with a pharmaceutical company in neuro-oncology. The company’s ligase program could be center stage in such a deal, Montagu said, as many pharmas are interested in transcription factors because they are undruggable.

Hotspot’s series A, a $45 million financing, came in July 2018 and was intended to last three years. The company was created with a seed round in March 2017.

The financing round was led by S.R. One Ltd. and included funds managed by Tekla Capital Management, MRL Ventures Fund, Solasta Ventures and Brace Pharma via affiliate Cleva Pharma, along with co-founding investors Atlas Venture and Sofinnova Partners. Hotspot’s series A, in July 2018, raised $45 million.