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Scala Biodesign Picks Up $16 Million for Protein-Design Software
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By Brian Gormley, WSJ Pro
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Good day. Most biotechnology startups hope to discover a drug that tickets them for riches. Scala Biodesign has secured $16 million in Series A financing to take a different tack.
Optimizing proteins has historically been a slow process of trial and error. Scala says its protein-design software enables researchers to more quickly find ways to solve problems such as improving a molecule’s stability without altering its biological activity.
But instead of using it to develop its own drugs, Tel Aviv-based Scala sells its software to the pharmaceutical industry and bio-based sectors such as flavors and fragrances.
The conventional drug-development model is high-risk: Most experimental medicines fail. But when a drug succeeds, the payoff is spectacular. Top pharmaceutical companies have splurged on acquisitions recently, snatching small drugmakers like Apellis Pharmaceuticals, which agreed this week to be acquired by Biogen for $5.6 billion upfront.
Scala formed in 2022 with a different vision. Protein design is a bottleneck across bio industries, and technology that loosened it would have wide appeal, said Scala co-founder and Chief Executive Ravit Netzer.
A startup drug developer, by contrast, can only work on a few compounds.
“That is not the best use of a technology that is so scalable,” she added.
Scala, whose technology has attracted pharmaceutical companies such as Boehringer Ingelheim, doesn’t face the same risks as a small drugmaker. With this financing led by Grove Ventures, its task is to prove it can deliver the same outsize success.
And now on to the news...
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Biogen’s headquarters in Cambridge, Mass. STEVEN SENNE/AP
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Smaller biotech buyouts. Big drugmakers on the deal hunt aren’t opening their wallets as wide as they used to.
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The industry’s latest acquisitions, well below $10 billion, reflect a more tightfisted approach to dealmaking than previous periods, when big companies regularly spent tens of billions.
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On Tuesday, Eli Lilly agreed to buy sleep drugmaker Centessa Pharmaceuticals for an initial $6.3 billion, while Biogen agreed to buy rare- and immune-disease drugmaker Apellis for $5.6 billion upfront. The deals are part of a run of small and midsize pharma acquisitions—a range that has become a sweet spot for companies seeking to bolster the work of their own labs or lineups.
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“If you do a lot of these little bolt-on deals, you can kind of craft your own portfolio that could totally complement something that you have going on internally,” said Karen Anderson, director of healthcare equity research at Morningstar.
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$6.3 Billion
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The initial amount Eli Lilly agreed to pay to acquire sleep drug-developer Centessa Pharmaceuticals
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Bayer Weighs U.S. Pharma Expansion as Turnaround Picks Up Speed
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Bayer is looking at expanding its pharmaceutical manufacturing footprint in the U.S., the head of its pharma unit said, as the business turns to the world’s largest drug market to fuel a turnaround. The pharma division of the German conglomerate is trying to turn a corner after the patent expiration of its two top-selling drugs hurt sales and earnings over the past couple of years, while uncertainty about legal battles and debt-reduction efforts at the broader group limited its financial headroom. Stefan Oelrich, the president of Bayer’s pharma division, said the business is leaving the patent cliff behind and poised to grow again.
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Musk’s SpaceX Files to Go Public in One of the Biggest IPOs Ever
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Elon Musk’s SpaceX is one step closer to staging what could be the largest initial public offering of all time. The satellite builder and rocket operator has confidentially filed IPO paperwork with the Securities and Exchange Commission, according to people familiar with the matter. SpaceX is aiming for an IPO that could raise between $40 billion and $80 billion, The Wall Street Journal has reported. The filing puts the company on track to potentially list shares by July, as Musk has told people is his goal. SpaceX would be the first of three mega-IPOs that could go in 2026: Artificial-intelligence companies OpenAI and
Anthropic are both waiting in the wings for potential offerings before year-end.
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People
Healthcare and life sciences growth investor Petrichor appointed Paul J. Sekhri as operating partner. In addition to his new role, Sekhri will continue to serve as chairman, president and chief executive officer of vTv Therapeutics.
Orionis Biosciences, which is focused on the discovery and development of precision medicines for cancer and immune system-related disorders, appointed Giulio Draetta as chief strategy officer.
Deals
Gyde, an AI-native brokerage platform, acquired Medicare agency Avid Health. Austin, Texas-based Gyde launched earlier this year with $60 million in funding led by Lightspeed Venture Partners.
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Ambrosia Biosciences, a Boulder, Colo.-based startup developing orally-delivered therapies for obesity and other metabolic disorders, scored $100 million in Series B funding from investors including Blue Owl Healthcare Opportunities and Boulder Ventures.
Generare, a Paris-based startup generating novel molecular data for drug development, raised €20 million (about $23 million) in Series A funding. Alven and Daphni co-led the round, which included participation from Teampact Ventures and others.
Create Wellness, a New York-based creatine gummy brand, picked up $20 million in Series B funding from investors including Alliance Consumer Growth and Unilever Ventures.
Jimini Health, a New York-based startup building AI infrastructure for behavioral health providers, secured $17 million in seed funding from investors including M13, Town Hall Ventures, LionBird and Zetta Venture Partners.
Avo, a New York-based platform that transforms electronic health records into intelligent systems of action, landed $10 million in Series A funding. Noro-Moseley Partners led the round, which saw participation from AlleyCorp, Las Olas Venture Capital, MedMountain Ventures and others.
Ambient Clinical Analytics, a startup providing digital health and clinical decision support automation tools, completed a $5 million strategic funding round from investors including Mairs & Power Venture Capital.
TippingPoint Biosciences, a San Francisco-based startup developing new therapies for diseases of chromatin dysfunction, closed a $4.5 million seed round from investors including SOSV.
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Piece by Piece Autism Centers received $340,000 in Medicaid payments per patient in 2023. JAMIE KELTER DAVIS FOR WSJ
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