biotech startups FAQ

Formed in 2018, Alltrna recently came out of stealth mode with an initial commitment of $50 million from Flagship. But it’s far from alone. Shape Therapeutics, Tevard Biosciences and HC Bioscience are all researching tRNA, too. ReCode Therapeutics, a biotech backed by EcoR1 Capital and several pharmaceutical companies, initially was, too. But over the past year the company decided to pivot, deprioritizing a tRNA program in favor of an mRNA one, a spokesperson for the company confirmed to BioPharma Dive after publication.

Companies working with next-generation RNA technologies remain in the earlier stages of drug development, though some are advancing quickly. In tRNA, Lovisa Afzelius, an origination partner at Flagship and the founding CEO of Alltrna, told BioPharma Dive last November that the startup could, in the “not too distant future,” reach the stage where it asks regulators for permission to begin human studies. The leadership team at Laronde, meanwhile, has said the company is on track to request multiple circular RNA drugs be cleared for human trials in 2023. And Orna isn’t far behind, estimating that its first program — an experimental treatment for cancer — will be ready for human testing in 2024. Correction: A previous version of this story incorrectly identified ReCode Therapeutics as researching tRNA-based medicines. The company previously deprioritized that research. The story had also included an incorrect total for ReCode’s funding.

Generally, these technologies are meant to overcome some of mRNA’s limitations. Replicate’s method, for example, may lead to medicines that could be administered less frequently or at smaller doses. “The difference with self-replicating RNA is we’re delivering a copy machine into the cell along with that instruction manual, so you can make a lot more copies and they last for a much longer period. And that creates a lot more protein,” Nathaniel Wang, one of the company’s co-founders, told BioPharma Dive in an interview last fall. Another goal is to make more durable medicines, given that most RNA is quickly broken down and flushed from the cell. For companies working with circular RNA, one of the draws has been the molecule’s non-linear shape, which lacks the loose ends that digestive enzymes latch onto. Laronde executives have said that their approach could, in theory, help protein expression last weeks or months. Scientists are also trying to prevent newer RNA-based drugs from triggering unwanted reactions from the immune system. The U.K.-based biotech VaxEquity, which is focused on self-amplifying RNA, has a technology it says can suppress responses from the “innate” immune system, the body’s first line of defense.

The companies working toward this new wave of RNA-based drugs use different approaches. One of the most popular revolves around transfer RNA, which transports and delivers the molecular building blocks that cells need to make proteins. Alltrna, a startup that launched publicly late last year, claims to be able to engineer tRNA to correct for errors in the genetic code that would otherwise impair protein production. The company is one of many formed and financed by Flagship Pioneering, the biotech incubator and investor that founded Moderna. It’s also one of at least four pursuing tRNA in one way or another. Another Flagship-backed company, Laronde, and a well-funded startup called Orna Therapeutics, are focused on what’s known as circular RNA. This type occurs naturally in cells and is considered much more stable than its mRNA counterpart. However, circular RNAs usually don’t make proteins. Laronde and Orna are trying to change that through engineered versions of these molecules. Their technologies attempt to program synthetic circular RNAs with certain genetic codes, as well as outfit them with a site that many RNA viruses use to dock onto the cell’s protein-producing machinery. Replicate Biosciences, a startup focused on self-replicating RNA, takes a page from viruses, too. The company aims to strip viral RNA of its more worrisome attributes, like spreading uncontrollably across cells, but to leave intact the genetic instructions that allow it to continuously duplicate. This self-replicating RNA would then be designed to manufacture helpful proteins.

At least six biotech startups have launched since 2017 to address shortfalls in cell and gene therapy manufacturing. The most richly funded, ElevateBio, has raised about $1.3 billion since it began working with drugmakers. It’s also spun out its own biotech startup with Boston Children’s Hospital to develop more convenient alternatives to current cancer cell therapies. More recently, Ascend Cell & Gene Therapies in the U.K. emerged from stealth armed with $130 million in funding and led by industry veterans. It’s focused on adeno-associated viruses, a heavily used type of viral vector, and has acquired some of its capacity and technology from the struggling Freeline Therapeutics. “AAV manufacturing is complex and needs teams that show real expertise and ownership,” said one of Ascend’s founding investors, Tim Funnell of Monograph Capital, in a statement on the company’s launch. “This led many advanced modality biotech developers to build their own internal CMC capabilities. However, these companies are now finding it difficult to sustain and fully utilize their facilities.” There are smaller ventures, too. A pair of University of Pennsylvania researchers who worked on the cell therapy Kymriah and the gene therapies Zolgensma and Luxturna launched VintaBio in April. Months before in January, biotech startup creator Versant Ventures debuted Vector BioMed to help supply startups with the "lentiviral" vectors often used in ex vivo treatments.

Cell and gene therapies involve materials that aren't used in many of the other products the pharma industry is well-versed in producing. Scientists design synthetic genetic material to deliver into patients, either via their own cells, benign viruses known as vectors or specially made bubbles of fat. Constructing these treatments is tricky even in a research setting, where small amounts of such material might be required for early experiments. But it's much harder for companies running clinical trials, or preparing for mass production. Manufacturing delays can wreak havoc on young companies, causing them to miss milestones that could endanger future funding. Established gene therapy biotechs like UniQure or BioMarin Pharmaceuticals have spent years and millions of dollars to build their own plants. But startups and academic labs — where a number of the approved cell and gene therapies originated — can’t afford that. “Academics have truly cutting-edge research, and I have been blown away by some of the creative ideas, novel modalities and breakthrough innovations that came about,” said Ran Zheng, the CEO of Landmark Bio, a Massachusetts-based company that caters to cell and gene therapy developers. “But that information needs to be translated into therapeutics, and this is the biggest, and probably the first, hurdle [startups] have to overcome.” Turning to contract manufacturers like Thermo Fisher and Catalent can be a solution, but brings problems of its own. Transferring technology from a small lab to a larger organization can be arduous and require troubleshooting for glitches that arise in the process. Big CDMOs may also prioritize more lucrative work with larger biotech and pharmaceutical firms. And they're struggling to meet the surging demand for cell and gene therapy manufacturing tools themselves. Building up capabilities internally can be costly for startups. Viral vectors, for instance, are expensive to make and handle. “You often see companies trying to own their own manufacturing and unfortunately, in this environment, if the product’s not successful, that's a heavy capital and operating expense to carry,” said Mike Paglia, a senior executive with ElevateBio, a richly funded startup that helps manufacture cell and gene therapies.

Rather than compete directly with larger CDMOs, some manufacturing startups aim to provide a more cost-efficient path for companies to develop in-house production capabilities. To appeal to younger biotechs that may need them, they are building relationships earlier and providing more services to attract first-time founders and small teams. Many of these conversations take place long before an application to begin human testing, so these smaller manufacturers work to teach startups about raw material control strategies and set realistic timelines to gather early clinical data. “Traditional CDMOs are like a kitchen, you'll give them a recipe and they make an entree,” said Zheng, who previously worked in manufacturing and operations at Orchard Therapeutics and Amgen. “That’s all they do. We're not like a kitchen where you just simply state the recipe. We actually ask our clients what ideas they have and we develop the recipe with them.” Some clients start from near the beginning, working with these newer manufacturers from the moment they identify a lead candidate. ElevateBio and Landmark Bio both help startups with laboratory studies to ensure that, down the line, they’re familiar with how to transfer their drugmaking technology to the companies that might eventually produce their therapies. Paglia, who previously worked at Bluebird bio, said the biggest hurdle for him and his former colleagues was transferring their technology to contract manufacturers. “Whether it was manufacturing our lentiviral vectors or cell therapy products, it took tremendous amounts of oversight to get those processes right because of the infancy of the industry,” he said. Still, outsourcing to a dedicated manufacturer can save biotechs millions of dollars in the long term, Paglia said, allowing them to put that money toward additional clinical studies. That has meant steady demand for CDMOs, and created business for new startups trying to help. Manufacturing startups have also attracted academics and nonprofits that struggled to get time with larger CDMOs. Landmark has worked with researchers who have received National Institutes of Health grants, for example. Ultimately, improving manufacturing might give companies an opportunity to rethink how they price cell and gene therapies, which are some of the costliest medicines to make. The few companies that have reached market have noted these high costs in setting price tags that range from hundreds of thousands to millions of dollars.

With demand for more CDMOs at an all-time high, these startups are partnering with drugmakers straight out of the gate. Though many rely on capital infusions from venture firms, they also can generate cash from their work early on, bringing returns to investors well before a typical biotech might. Landmark Bio had its first customer “even before we put a sign on the door,” Zheng said in October. In early June, it announced a partnership with InnDura, a new biotech company focused on “natural killer” cell research. ElevateBio, having been around for some years, boasts a larger client list, noting in a May fundraising announcement that it added more than 15 new biopharmaceutical partners over the past year. Its subsidiary Life Edit Therapeutics is collaborating with large drugmakers like Novo Nordisk and Moderna. VintaBio has a 22,500-square-foot facility in Philadelphia that’s now open for business, while Vector BioMed is working out of Gaithersburg, Maryland. Shape Therapeutics is somewhat different, as it’s working on its own research, too. But it has also hinted at playing a manufacturing role, developing a new kind of cell line for producing adeno-associated viruses and indicating plans to build a factory where other companies can make their therapies.