Mariana Oncology, Inc.

Dive Brief:Atlas Venture said Thursday that its raised $450 million for its 14th fund, through which the firm will continue to seed and grow new biotechnology companies.Partner Bruce Booth called the fundraising round the smoothest and most efficient hes seen in 20 years at the firm. Given the level of demand, we could have raised several multiples of what we set as our hard cap of $450 million, Booth wrote in a blog post.Booth, Kevin Bitterman, Michael Gladstone, David Grayzel and Jason Rhodes are the investing partners in Atlas new fund. Jean-Franois Formela, who joined Atlas in 1993 to build up its life science franchise and initiated biotech investing at the firm, decided to stop making new investments and instead will focus on his current portfolio and other duties at Atlas.Dive Insight:Investor confidence in biotechnology is recovering after a significant dropoff in recent years. And 2024 has seen a number of multibillion-dollar fundraises from venture capital firms, including Arch Venture Partners, Flagship Pioneering, Bain Capital Life Sciences and Forbion.But Atlas, one of the most prominent early-stage biotech investors, is purposely keeping its funds relatively small, according to Booth. The firm has some scar tissue from growing too fast in the early part of the century, when it invested in tech as well as biotech companies. Atlas is now determined to stay disciplined and focused on the model that we continue to try to perfect: seed-led venture creation, he wrote.A modest fund size better allows the firm to be dynamic and adaptive and gives a better chance of success in early-stage biotech investing, Booth wrote. We want to remain company builders focused on disciplined capital allocation and driving superlative returns, and resist the temptation to become asset aggregators in order to absorb higher fees, he added.The model has worked well for Atlas over the last two years, as the firm launched 16 new biotech companies and saw several startups in its portfolio achieve significant milestones.Versanis, Aiolos Bio, Mariana Oncology and an immune disease drug developed by Nimbus Therapeuticswere all acquired. Four other companies went public and another Day One Biopharmaceuticals got its first regulatory approval for a drug.Atlas has invested in more than 30 fundraising rounds by biotech startups since the beginning of 2022, according to data compiled by BioPharma Dive. All told, Atlas portfolio companies have almost 50 clinical trials underway. The firm last closed one of its own funds in 2022, raising $450 million. '

Novartis is buying gene therapy and neuroscience biotech Kate Therapeutics in a deal worth $1.1 billion in upfront and milestone payments, the Swiss pharma confirmed to Endpoints News on Thursday. And Novartis is not done yet. It is still on the lookout for bolt-on M&A opportunities — but don’t expect them to go higher than $3 billion. “That’s not that we couldn’t do a little bit bigger, but that’s the majority of the available target companies, if you will,” Novartis CFO Harry Kirsch told the media ahead of its investor event in London on Thursday. CEO Vas Narasimhan added that a lot of M&A from the recent past has been in the $1 billion to $2 billion range, pointing to its acquisitions of Mariana Oncology and KateTx. Over the past eight years, it made $5 billion to $10 billion deals only “occasionally” because of valuation considerations and “financial discipline,” he added. Novartis will take on KateTx’s pipeline of preclinical candidates in Duchenne muscular dystrophy, facioscapulohumeral muscular dystrophy and myotonic dystrophy type 1. The San Diego biotech’s gene therapy tech features adeno-associated virus capsids that deliver their payloads into specific tissues to avoid off-target issues such as hepatic side effects. In June 2023, it said that it was partnering with Astellas on a neuromuscular disease called X-linked myotubular myopathy. Novartis revealed its purchase of KateTx ahead of its Meet Novartis Management event in London that was intended to reassure investors its pure-play strategy is bearing fruit now and in the next several years. A key part of its growth strategy is more M&A as “replacement power,” with the company facing the loss of exclusivity for key drugs such as Entresto , Kirsch said. When asked if changes to the Federal Trade Commission could lead to Novartis raising its M&A budget, Narasimhan said the FTC is not a major driver of its decisions. As a part of its reorg, the company zeroed in on four therapeutic spaces: cardiovascular-renal-metabolic, immunology, neuroscience and oncology. “Preclinical, Phase 1, Phase 2 area — that’s the opportunity where we can step in” and Novartis can add value to the acquired company, Narasimhan said, adding that it’s challenging to “find synergies, harder to justify” with later-stage candidates. Narasimhan said that when it bought MorphoSys for $2.9 billion, its lead oncology candidate , pelabresib, was in an ongoing Phase 3 trial. “We saw the opportunity in an area of myelofibrosis that we’ve been in for a long period of time, and we took a bet on an ongoing clinical trial,” he said, adding that if it had waited for the late-stage readout, the purchase price would have been “double at least.” But that bet on MorphoSys led to the company taking an $800 million impairment hit just months after the deal closed due to emergent malignancies. “In this case, it didn’t go our way,” he said, nonetheless noting the company’s overall M&A track record . As for pelabresib, the company’s next update should come in the second half of next year. Narasimhan said it is monitoring patients until the middle of next year. “We are also planning to conduct additional studies to look at certain subpopulations of myelofibrosis patients where pelabresib could have a better benefit-risk profile. So I think all of that will take us at least until 2027 — it might take longer, depending on the safety topic,“ he added.

Through a new deal, Novartis has added a handful of experimental gene therapies to its neuroscience research pipeline.Novartis is betting the gene therapy technologies developed by Kate Therapeutics, a biotechnology startup founded four years ago, can lead to treatments for an array of neuromuscular diseases. The Swiss pharmaceutical giant said Thursday it has acquired Kate, in a transaction that could ultimately be worth as much as $1.1 billion. Novartis did not disclose what it paid upfront, but a source familiar with the deal told BioPharma Dive the sum was substantially greater than Kates Series A round last year.In buying Kate, Novartis now owns a slate of preclinical gene therapies for rare, muscle-eroding diseases. The biotechs two most advanced programs respectively target Duchenne muscular dystrophy and a condition known as X-linked myotubular myopathy. Astellas Pharma, one of the largest drugmakers is Japan, has been partnering on that latter program since Kate officially launched in June of last year.Kate debuted with $51 million from that Series A fundraising round, which was co-led by its founder, Westlake Village Partners, and Versant Ventures. The company claims its technology which stems from research conducted by a team of scientists at the Broad Institute of MIT and Harvard can make gene therapies that are more precise and able to reach parts of the body they normally have trouble hitting, like the heart. Sharif Tabebordbar, who was the main author of that research, went on to co-found Kate and now serves as its chief scientific officer.We have been highly impressed with the rigor and potential of Kates science, and we are confident this acquisition will further enhance our ability to bring forward new therapeutic options for patients living with neuromuscular diseases, said Fiona Marshall, Novartis president of biomedical research, in a statement.Novartis already has experience in neuromuscular gene therapies, having launched Zolgensma, a blockbuster medicine for spinal muscular atrophy. Zolgensma had been given the growth driver moniker not too long ago, but sales of the drug havent been as strong recently. They totaled $1.2 billion in 2023, down 9% under constant currency exchange rates. And they were flat in the third quarter, at $308 million, compared to the same three-month period last year.Sales from Novartis broader neuroscience business were still up 19% in the third quarter, thanks mostly to the multiple sclerosis medication Kesimpta.The Kate acquisition comes almost a year and a half after Novartis agreed to buy DTx Pharma, a startup aiming to use RNA drugmaking technology to treat neurological diseases. The deal, which carried a $500 million upfront payment, handed Novartis a few experimental drugs that had yet to reach human testing.DTx was one in a series of smaller-scale purchases Novartis made over the past couple years. The company snagged the radiopharmaceutical developer Mariana Oncology for $1 billion, the kidney disease drugmaker Chinook Therapeutics for as much as $3.5 billion, and the cancer specialist Morphosys for roughly $2.9 billion.It also scored a portfolio of potential immune system drugs by buying a subsidiary of IFM Therapeutics for $90 million up front.Ned Pagliarulo contributed reportingEditors note: This story has been updated to further characterize the acquisition price Novartis paid for Kate. '