BEIJING – Cross-border biotech Denovo Biopharma LLC, based in San Diego, the U.S. and Hangzhou, China, closed a series C funding round on June 29 to pocket ¥590 million (US$83.5 million). Part of the proceeds will go to phase III trials of DB-102 (enzastaurin), a small-molecule discarded by Eli Lilly and Co., in patients with diffuse large B-cell lymphoma (DLBCL) and glioblastoma. This financing round also means that Denovo is a step closer to launching an IPO.
The round was led by CICC capital, with participation by existing investors such as Jiuyou Capital, Sangel Capital, Share Capital and CITIC Securities, as well as new investors, including the Guozhong VC Group and Yingke PE.
Prior to the latest round, Denovo closed a series B financing in late 2017 to secure $43 million to support a global multicenter phase III study of DB-102 in DLBCL. In October 2019, it said it launched a pre-IPO round to support a multicenter phase IIb trial testing the drug in patients with newly diagnosed glioblastoma.
Denovo is known for buying late-stage distressed assets from pharma companies to give them a second chance using its biomarker discovery platform. Its main focus is on oncology and central nervous system diseases.
Denovo CEO Luo Wen told BioWorld that the company raised double the expected amount in the series C round, reflecting investors’ confidence in the company. “Unlike other players that focus on me-too drugs or gaining China rights, Denovo is an innovative company that has six potentially first-in-first assets with global rights,” he said, adding that the company had doubled the size of its pipeline in one year.
While redeveloping drug candidates that previously failed late-stage trials could be risky, Luo said he remains confident that having an extensive pipeline can diversify risks and increase growth potential.
Following the series C round, the company’s focus remains on advancing core asset DB-102, an orally available investigational small molecule and a serine/threonine kinase inhibitor of the PKC beta and AKT pathways.
Lilly spent more than 15 years developing the drug and had run 60-plus clinical trials, but it failed to hit efficacy targets in DLBCL or in glioblastoma in phase III trials.
After acquiring the asset, Denovo identified a novel genetic biomarker, DGM1, which is a potentially predictive biomarker for DB-102 response in patients with DLBCL. With that discovery, the company is now conducting biomarker-guided clinical trials of DB-102 for DLBCL and glioblastoma, including a randomized, placebo-controlled phase III study to assess DB-102 plus R-CHOP in patients with DLBCL that is 90% enrolled.
Now having abundant resources, Luo told BioWorld that the company is preparing to move DB-102 to phase III trials in China and the U.S. for glioblastoma this year. The move comes after the FDA granted an IND approval for a phase IIb trial in October 2019.
“GBM remains one of the toughest cancers to treat and numerous attempts have failed, including anti-PD-1 antibodies,” said Isabel Han, vice president of Denovo’s clinical department. “DB-102 treatment guided by the novel DGM1 biomarker could potentially provide a breakthrough for this severely unmet medical need.”
The company also found that DGM1 predicts a survival benefit in patients with glioblastoma treated with DB-102 plus temozolomide.
The drug could have the potential to treat diseases beyond cancer. In January, Rumpus Therapeutics Inc., of Ambler, Pa., entered an agreement with Denovo to gain the option of acquiring an exclusive license to develop and commercialize DB-102 worldwide for rare genetic pediatric-onset or congenital disorders outside of oncology.
Business model leads to great deals
Using its abilities in biomarker discovery, Denovo also discovered a novel genetic biomarker, DGM4, for another asset, DB-104, in March. DB104 (liafensine) was originally developed by Albany Molecular Research Inc. and Bristol-Myers Squibb Co. for treating depression.
Encouraged by the discovery, Luo said part of the proceeds from the series C will be used to prepare for an IND application for DB-104. The company is also actively identifying biomarkers for its four other assets. Those include DB-103 (pomaglumetad), also acquired from Lilly and designed to selectively act on the glutamic acid mGlu2/3 receptor to treat schizophrenia. Also in development is DB-105 for Alzheimer's disease discovered by Orion Corp., and DB-106 (vosaroxin) for acute myeloid leukemia acquired from Sunesis Pharmaceuticals in December 2019.
The latest addition to Denovo’s pipeline is DB-107, a gene therapy developed by Tocagen Inc. designed to treat recurrent high-grade glioma. In April, Denovo acquired it from Tocagen in a deal that also included Tocagen’s retroviral replicating vector platform and several early stage development programs targeting PD-L1 and other immuno-oncology targets.
Tocagen said in September 2019 that the therapy candidate failed to meet either primary or secondary endpoints in a phase III trial. Denovo will use its biomarker platform to search for pharmacogenomic predictors for DB-107 efficacy, as there were subsets of patients who showed signs of beneficial activity in the failed trial.
“We got a great deal on DB-107,” said Luo, without disclosing the financial terms. He stressed that Denovo normally pays little to get the global rights of the distressed assets from other companies, so its business model leads to good deals.
He also revealed to BioWorld that the company expects to soon close another deal that will bring in three new assets as part of the company’s plan to expand its pipeline to 10 assets.
Denovo’s chief financial officer, Carrie Chen, also told BioWorld that the company is preparing for an IPO in the next 12 to 24 months, without specifying which listing destination it is looking at. “We are still evaluating our options,” she said.