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Avalon Partnership Adds 2 More Startups

Avalon Ventures LLC announced the launch of two biotech companies formed through its collaboration with British drugmaker, GlaxoSmithKline Plc. The partnership will funnel $495 million into 10 new biotech companies by 2016.

“Our collaboration with GSK represents a new model for driving early-stage drug discovery,” said Jay Lichter, managing director at Avalon. “By combining the nimble startup mentality of Avalon with the unmatched research and development expertise and resources of a global pharmaceutical giant like GSK, in just 16 months we have launched three new companies in diverse therapeutic areas.”

Silarus Therapeutics Inc. and Thyritope Biosciences Inc. join the partnership’s first startup, Sitari Pharmaceuticals Inc., which launched last November. The two new companies will each receive $10 million in Series A financing — $3 million from Avalon and the remaining $7 million by GSK.

Both companies will be housed at COI Pharmaceuticals Inc. in San Diego — a space owned and shared by Avalon, in an effort to share resources such as lab equipment, office space and human resources.

Community of Innovation

Lichter says the shared space also develops a community of innovation in which young life science companies can bounce ideas off one another.

Based on the terms of the Avalon and GSK collaboration established in April of last year, Avalon will provide Silarus and Thyritope with executive leadership and operational management. Lichter will be assuming responsibilities of a traditional CEO for both companies.

“Typically you hire a CEO for fundraising, which is a full time job,” Lichter said. “With this model, I don’t need to raise money and I don’t need a partner because I already have one. The burden on me is adult supervision, and I have two scientific officers and other senior management who can guide the day-to-day research.”

GSK’s cut in the deal involves alleviated risk and less grunt work in addition to its share of the profits.

“This whole business is full of risk,” said Damien McDevitt, GSK vice president and head of the company’s research and development satellite office in San Diego. “Avalon brings their best ideas forward, which helps us alleviate risk because it’s not just our idea. But also we’re sharing resources.”

Once the young life science startups are developed enough to be considered by pharmaceutical companies for purchase, GSK also gets the rights of first purchase for all 10 companies seeded by the partnership.

Silarus Therapeutics

Silarus Therapeutics is targeting the recently discovered hormone, erythroferrone, for treating disorders involving iron regulation in red blood cell production ─ such as anemia and iron overload. Silarus was founded based on intellectual property of the University of California, Los Angeles discovered by investigators Tomas Ganz and Elizabeta Nemeth, both professors of medicine at the UCLA David Geffen School of Medicine.

Silarus is attempting to make two products — one for anemia and one for blood overload conditions such as hematosis.

Thyritope Biosciences

Thyritope Biosciences is developing therapeutics for Graves’ disease, an autoimmune disorder caused by antibodies that over-stimulate the thyroid and cause excessive thyroid hormone production. Specifically, the company is focusing on an element of the disease involving the eyes. When antibodies stimulate the tissue around the eyes, it results in an increase of orbital fat and extra-ocular muscle volume, which causes the bulging of the eyes — a recognizable characteristic of Graves’ disease. Although Graves’ orbitopathy is what Thyritope is focusing on first, Lichter said he hopes the company’s research will eventually impact other elements of the disease.

“There’s a debate about whether Graves’ disease is well managed,” said Lichter. “So our goal is to produce a molecule that has a beneficial affect across the board.”

Thyritope was founded based on molecular evolution technology developed by Patrick Daugherty, professor of chemical engineering and biomolecular science and engineering at University of California, Santa Barbara. The technology was commercialized by Serimmune Inc., Daugherty’s diagnostic company in Santa Barbara.

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