Despite the pandemic slowing funding activity for startups in many industries, one that has remained strong is biotech.
Following a string of other health care-related funding rounds in recent months, Southlake-based OncoNano Medicine, a biotech company focused on cancer diagnosis and treatment, announced receiving a $9.97 million grant from the Cancer Prevention and Research Institute of Texas (CPRIT) to look at expanded uses on one of its products.
“With limited tools available today that allow doctors to visualize tumors that have metastasized, especially small and disperse ones often characteristic of metastatic disease, the funding we received from CPRIT… has the potential to solve a tremendous unmet need,” said Ravi Srinivasan, CEO and president of OncoNano Medicine, in a statement.
OncoNano develops pH-activated compounds that allow surgeons to better visualize cancer tumors during surgery by making cancerous tissue glow. The new funding will go towards research on its ONM-100 product, which intraoperatively images tumors during surgery.
The funding follows a $6 million grant OncoNano received from CPRIT to advance research on the technology in 2016. After receiving a Fast Track designation from the FDA to bring the product to market, during Phase 2 of clinical trials, OncoNano discovered ONM-100 also had the ability to identify metastatic diseases, as well as cancerous tissue. The company says the additional application could help cut down on false diagnoses, as well as help save patient lives.
In addition to ONM-100, OncoNano is also developing a number of other therapies focused to diagnosing and treating cancer. Of all its therapies, the ONM-100 is the only one so far to make it past preclinical phases. One product, the ONM-500, which OncoNano is developing with CPRIT and activates T-cells in the body, received a $15.4 million grant in September of last year from the research organization.
“We’re looking forward to successful clinical trials that clearly demonstrate favorable impact to cancer patient care,” said Cindy WalkerPeach, chief product development officer at CPRIT, in a statement.
The latest round of funding brings the TechFW-grad’s total to about $65 million, according to Crunchbase. In addition to grant funding, OncoNano has also raised more than $35 million in VC funding, largely from Los Angeles-based firm Salem Partners. The company was founded in 2014 by Srinivasan, who recently joined the board of clinical-stage biotech company CAGE Bio, which moved into the UNT Health Science Center at Fort Worth last month.
While VC funding of startups in many industries has slowed – Q2 of this year marked a nearly 50 percent year-over-year decline – biotech and health care startup funding has remained relatively strong. According to Venture Capital Journal, through June, VCs have put more than $14.8 billion into companies in this sector, putting it on track to surpass the $23 billion that was raised for biotech companies in all of 2019. The journal said that while the pandemic has highlighted the importance of health care and new drug research, the industry has likely been able to continue to do well due to the industry being largely recession-proof, companies being able to quickly pivot to virtual working and the fact that VCs know many life science startups take years to begin generating revenue.
“For a number of reasons, risks associated with most biotech companies did not change when the coronavirus erupted and stay-at-home orders went into effect,” Venture Capital Journal wrote.
This trend tracks with recent funding deals in the Metroplex. 2020 has seen Fort Worth- and Paris-based Eyevensys raise $30 million in a Series B, health care AI startup Perimeter Medical Imaging move its HQ to North Texas following a $7.4 million grant from CPRIT, and Dallas-based cancer biotech startup Lantern Pharma net about $26 million in an IPO. This year has also seen some massive rounds, including a $95 million Series B for Dallas-based central nervous system-focused biotech startup Taysha Gene Therapies led by Fidelity Management & Research company, which added to a $30 million Seed round the company landed in April.
