Biotech Startup Backed by Moderna Creator Raises $440 Million
(Bloomberg) -- Laronde, a biotech startup backed by the venture firm that helped create Moderna Inc., raised $440 million in a financing round to develop new therapies using what it’s calling endless RNA.
Like the messenger RNA technology that powers vaccines from Moderna and other drugmakers, endless RNA can deliver detailed instructions to cells for making proteins. What makes eRNA different, Laronde executives say, is that its circular shape allows it to repeat its message over and over, for a more potent, lasting impact.
That key feature -- the company’s name is the French word for “round” -- could prevent the body from breaking it down quickly, making it an alluring candidate to treat diseases.
“As we saw with the pandemic, by having the code of the protein you want to make, you can make an mRNA pretty quickly,” said Avak Kahvejian, Laronde’s founding chief executive officer and a general partner at Flagship Pioneering Inc., the venture capital firm that established Moderna. “With eRNA, we can do the same.”
Also participating in the series B funding round are T. Rowe Price Associates, Invus Group LLC, the Canada Pension Plan Investment Board, Fidelity Investments and accounts managed by BlackRock Inc. The roster reflects the growing appetite among institutional investors and private-equity firms to bet on science, and the prospect of big returns, in its earliest phases.
“What struck me is that the opportunity set for eRNA is very, very large,” said Paul McCracken, managing director at Canada Pension Plan Investment Board, who reviewed early data shared by Laronde.
Laronde plans to use the money to hire staff and build a factory for clinical and commercial manufacturing. It was valued at $38 million in 2019, according to Pitchbook, and didn’t disclose its current valuation.
Like all early-stage biotech companies, Laronde’s ideas may not result in approved products. If successful, however, eRNA could become a completely new class of medicines, Kahvejian said.
The applications for the technology are broad, so the company will need to choose which make the most strategic sense, said Chief Executive Officer Diego Miralles. Laronde is still in the process of deciding which therapeutic areas to prioritize, he said.
Monoclonal antibodies are one type of treatment eRNA could replace, Miralles said. The therapy is made using large tanks and delivered to patients via infusion. By contrast, eRNA could deliver the code for a person’s body to produce the same outcome.
“That’s what’s potentially transformative,” Miralles said.
Cambridge, Massachusetts-based Laronde formally launched this year. It was originally formed in 2017 and incubated within Flagship. Just down the road, Orna Therapeutics Inc. is pursuing a similar approach with the backing of MPM Capital and biotech giants like Gilead Sciences Inc.’s Kite unit and Bristol Myers-Squibb Co.
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