Kalypsys Inc. raised $43 million in its first round of financing and will now look to grow the technology that gave it its start.
Kalypsys now has funding for approximately 24 months, said Pratik Shah, chief business officer at Kalypsys, who found that the cash flows a little easier for start-ups with a history.
“We were in the fortunate position of being oversubscribed,” Shah told BioWorld Today. “We were glad to have a group of investors recognize the value of a tremendous technology platform, our head start at inception and founders with a strong track record. We’ll use [the financing] to aggressively build our discovery program and product portfolio and to expand our research infrastructure.”
Kalypsys’ founding team includes Shah, Randy King, John Diekman, Kevin Lustig and Peter Shultz. The San Diego-based company was spun out of the Genomics Institute of the Novartis Research Foundation (GNF) in June, and the biological, chemical and information technologies that make up its platform were developed there. GNF started with a $250 million commitment from the Novartis Research Foundation, Shah said, but once it developed technologies that could stand alone, Kalypsys was born.
“Kalypsys came about because GNF had spent a lot of time and energy and money in developing and validating these technologies and was having success in using them,” he said. “[Novartis] realized there was a broader opportunity than what GNF could fully utilize, so Kalypsys was created to use these technologies to create value.”
At about 25 employees now, the company is expected to bulge to more than 60 people by year’s end.
Kalypsys uses automation technologies to first evaluate drug candidates in cellular models of disease, then optimizes select candidates. It develops assays using pathway-based models of human disease and toxicity, then uses its Discovery System to carry out drug screening. The core of the Kalypsys screening platform is a pathway-based, discovery ultra-high-throughput screening system.
Lustig, director of lead discovery at Kalypsys, said his company’s technology is allowing Kalypsys to juggle the drug discovery formula.
“We are rethinking when genomics should be applied [in drug discovery],” he told BioWorld Today. “It should not be applied early in the process to do target validation. Rather than focus on that, our focus is on compound validation. We’ve taken genomics technologies and put it more downstream.”
With that platform, Kalypsys is setting its eyes on building a product portfolio.
“We are in the process of launching our discovery efforts,” Shah said. “The objective is now to advance the programs and discover new leads and discover genes.”
Although the platform is “broadly applicable in multiple therapeutic areas,” Kalypsys plans to focus initially on the “inflammation, oncology and metabolic/cardiovascular” areas, Shah said.
The company has at least two plans for its technologies, Shah said.
“We are an integrated drug discovery company and I think we will seek strategic partnering opportunities by which we can accelerate the discovery programs for ourselves and our partners,” he said, but added that “there will be instances where we may have products that we may wish to license to others.”
Pointing out that most of the best-selling drugs “were discovered before the genomics revolution,” Lustig likened Kalypsys’ platform to a biotechnology blast from the past.
“We are turning the drug discovery process upside-down,” he said. “This set of core technologies allows us to carry out this really old-fashioned way of doing drug discovery on an industrial scale.”
The Series A financing was led by the Sprout Group, of Menlo Park, Calif., and co-led by Tavistock Life Sciences, of Windermere, Fla. Other investors included CMEA Ventures, of San Francisco; Lombard Odier & Gie, of Geneva; Novartis BioVenture Fund, of La Jolla, Calif.; Aravis Ventures, of San Francisco; and the individual investor Alejandro Zaffaroni.