The pivot: Turnstone Biologics opens a new chapter with a switch to clinical development and a new venture round to pay for it

21 Jul 2021
endpts.com
VaccineAcquisition
In biotech, most startups get about 5 years to get their preclinical act in order and jump into human studies before the backers get restive and start looking for the exits. At the 2015-founded Turnstone Biologics, they hit that line. But instead of losing its investors’ interest, it’s been picking up speed and backers. Now, with a lead oncolytic virus in an early-stage study and a second therapy from the TIL side poised for an IND, the team under CEO Sammy Farah has changed the story to clinical development. And they scored an $80 million Series D from a broad syndicate to get this new chapter under way in style. “Turnstone evolved, I think, in a more traditional way than the companies being developed today are,” says Farah. “We raised, before this Series D, 3 venture capital rounds. And they’ve all been pretty modest.” The total was $90 million for the first 3 years, and they added business deals — an alliance with Takeda, which took an equity stake, stands out — for non-dilutive cash. Now he sees Turnstone as more of a momentum story coming out of the relatively slow initial buildup. “I think in many ways this was the traditional model,” agrees Versant’s Jerel Davis, who jumped into the game here with the A round in 2015. “Their A, B and C are what you typically see in the A today. But I think the reality is that the company pivoted.” And the business deals allowed the biotech to wait to advance the more promising programs forward. That pivot was away from oncolytic viruses simply as a cancer vaccine — a “brutally tough” proposition, in Farah’s words, which afflicted others in the field — to a new oncolytic virus tech with more of a cutting-edge approach that could also deliver other therapeutics. The payload includes CTLA-4, FLT3 ligand and IL-12, on top of the viral approach of infecting cancer cells, blowing them up and recruiting immune cells to the tumor. Turnstone looped in the TIL work at the beginning of the year with the acquisition of Myst Therapeutics, which added San Diego to its list of work sites. It didn’t say how much it paid for the company, but it wasn’t likely a big sum — at least not upfront. And now Farah and the team see significant upside not just as a separate, individual approach, but also combined with their oncolytic virus therapy. Farah also believes that they have a better approach to tumor infiltrating lymphocytes, moving away from “bulk TILs” to expanding larger sets of lymphocytes better suited to the task of attacking a tumor. That’s what they have to prove as clinical work launches before the end of this year. There have been some changes in the C-suite. CMO Mike Burgess left for SpringWorks — though he remains on the board — and the company recruited Stewart Abbot from Adicet as CSO. PFM Health Sciences and Point72 led this last round. Additional new investors Eventide Asset Management, Surveyor Capital (a Citadel company), Ridgeback Capital Investments, Takeda Ventures Inc., CaaS Capital, JM Family Enterprises, Inc., Northleaf Capital Partners, 404 Bio and an undisclosed investor were joined by existing investors Versant Ventures, OrbiMed, F-Prime Capital, Sectoral Asset Management, Sixty Degree Capital, Brace Pharma Capital and Teralys Capital.
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