A health care company in the Triangle that's developing a lead program licensed from Duke University has raised $35 million.
The funding, which came in a Series A round, will accelerate the development of Tellus Therapeutics' lead program into the clinic. Tellus also plans to hire a handful of new employees and move into lab and office space in Research Triangle Park.
Tellus was founded about four years ago to advance technology developed by co-founder Dr. Eric Benner, a neonatologist at Duke University and the company's acting chief scientific officer. Through its lead program, TT-20, Tellus aims to develop a treatment for white matter brain injury in preterm infants. This injury can result in poor neurodevelopment outcomes, including cerebral palsy, a disorder that around 10,000 babies are born with annually.
This financing will also support Tellus as it begins to build out a pipeline of discovery programs focused on addressing unmet medical needs of newborns. "It's a unique patient population that doesn't get the amount of attention of drug development as other populations," Tellus CEO and co-founder Jason Kralic said.
Over the summer, Tellus met with the U.S. Food and Drug Administration to discuss the company's next steps in moving its lead program into clinical trials. Kralic said the company will focus on completing this work over the next year, with plans to reach the clinic in 2024.
As it transitions into this next phase, Tellus is moving into lab and office space at Alexandria LaunchLabs in RTP. The company is also adding to its team of two employees: Kralic and Austin Schwartz, the company's vice president of operations. Kralic said that next year Tellus plans to hire an employee focused on clinical trial operations and a scientist to support the company building out a pipeline of discovery programs as the lead program moves forward.
With its limited headcount, the preclinical company has advanced its lead program by working with a number of consultants and the Boston-based life sciences accelerator Xontogeny, which provides seed investments and strategic and operational support to early-stage companies.
Xontogeny and Tellus have partnered since 2020. In May of 2021, Xontogeny provided the company with seed funding in the low millions. Kralic said the relationship made closing the Series A round an easier process even in a difficult funding environment.
"We set technical objectives ... had a budget, and we were able to meet those milestones," Kralic said.
The Series A round was led by the Preceptive Xontogeny Fund, or PXV Fund, an early-stage venture capital fund managed by Xontogeny and Perceptive Advisors. The goal of the fund is to advance preclinical assets into or through early clinical development. The fund is led by portfolio manager Chris Garabedian, who is also CEO of Xontogeny.
Xontogeny and Perceptive Advisors teamed up and closed an initial fund, PXV Fund I, at $210 million in December 2019. This was followed by a second fund, PXV Fund II, which closed at $515 million in May 2021.
