Frontier Medicines has just closed a $80 million fundraising, but, according to CEO Chris Varma, Ph.D., corralling the capital was, in his own words, harder than the bleakest days of the Great Recession.
“I’ve been either an investor or an entrepreneur [and] CEO for a long time—well over two decades—and this is definitely one of the hardest financings I’ve ever done,” he said in an interview. “I actually think that fundraising last year was worse than the fundraisings I’ve done during the eye of the financial crisis, even dating back to the dot com bubble bust.”
He attributed the difficulty in part to the tech sector beginning its recovery last year, drawing in early-stage investors, while drug developers scratched and clawed for new money.
To make Varma’s job harder, he had to sell investors on why Frontier and its lead dual-inhibiting KRAS G12C asset were different from its competitors. Mainly, that meant Mirati Therapeutics, which presented some hard lessons for Frontier as the company rebounded from the European rejection of its KRAS cancer med Krazati. Mirati requested a reexamination that was ultimately successful to secure a positive opinion. All this happened at the same time that Bristol Myers Squibb worked to close its acquisition of Mirati.
“What we’ve learned from that is you’ve got to develop a molecule that can address—for KRAS specifically—the on and the off forms at the same time [and] completely knock out the mutant target so that you can see transformative benefit for patients,” Varma said.
KRAS lives in both an “on” and “off” state depending on which other guanine nucleotide-binding proteins (G-proteins) it’s bound to, impacting how it transmits upstream signals. Frontier’s lead asset, FMC-376, is a small molecule for both states, which is expected to maximize inhibition and wipe out the mutant forms of the gene altogether.
In conjunction with the financing, Frontier has dosed the first patient in a phase 1/2 trial testing FMC-376 in patients with solid tumors. The new money will go toward advancing that trial and other follow-up candidates.
With investors like Deerfield and RA Capital backing the company through its previous two raises (RA joined the series B syndicate), Frontier considered an IPO this time around, Varma said, deciding ultimately that because they don’t have to, they probably shouldn’t. He also said it helps to have clinical data in hand when you hit Wall Street, something he expects by the end of this year, teeing up a potential IPO afterward. Joining the investor team is Galapagos, the Dutch biotech that in addition to an approved JAK1 inhibitor is developing two cell therapies aimed at cancer.
On the surface, Frontier seems like the kind of biotech that could have scared off investors because of the possible Inflation Reduction Act implications. It’s a small-molecule-focused startup with a lead asset looking to topple existing entrants in the space. To Varma’s surprise, the topic didn’t come up as much as he thought it would in fundraising talks. Aiding Frontier’s case, Varma thinks, is that the company’s platform is disease-agnostic, though early undisclosed candidates are largely aimed at cancer.
“From the very beginning, we have been looking at disease targets in cancer and immunology and other areas,” he said. “We’re going to broaden our therapeutic focus over time.”