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Biotech Startup Gets $130 Million to Settle 'Unfinished Business'
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By Brian Gormley, WSJ Pro
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Good day. James Mackay’s previous effort to provide gout patients with a novel treatment ended in disappointment. Venture capitalists are helping him give it another shot.
Mackay is co-founder and chief executive of Crystalys Therapeutics, a biotech startup that has secured $130 million in Series B financing to advance a treatment for gout, a painful condition stemming from excess uric acid in the blood. Crystalys’s drug is designed to block reabsorption of uric acid, allowing more of it to be excreted in urine.
Before Crystalys, Mackay was CEO of Ardea Biosciences, a subsidiary of U.K. drugmaker AstraZeneca, where he led a team that secured U.S. and European regulatory approval for Zurampic, a gout drug that targets the molecule URAT1.
AstraZeneca in 2016 licensed U.S. rights to Zurampic to biotech Ironwood Pharmaceuticals and European and Latin American rights to pharmaceutical company Grünenthal. But Zurampic, which carried a black box warning for acute renal failure, wasn’t a commercial success and was later pulled from the market for business reasons.
Crystalys, which raised a $205 million Series A last year, is developing a next-generation URAT1 inhibitor. The drug was invented by Japanese company Fuji Yakuhin and is approved in Japan, China, the Philippines, Taiwan and Thailand.
Crystalys licensed North American, European and Middle East rights to the drug, which is much more selective and about a thousand-fold more potent than Zurampic, Mackay said.
As a result, he expects it to be better than Zurampic and an option for patients whose gout isn’t well-controlled by the current first-line treatments.
“When we started Crystalys Therapeutics, this was unfinished business for us,” Mackay said.
And now on to the news...
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Competition for biotech reverse mergers is intensifying. PHOTO: BLOOMBERG NEWS
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Putting it in reverse. Lingering unease from the recent financing downturn is leading more biotechnology startups to go public by “reverse merging” with a public company.
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In a reverse merger, a private company combines with a public one and the startup’s investors become the majority shareholders of the new, combined business. Usually, a public company agrees to it because it has suffered a severe setback, such as a failed clinical trial, and has little hope of recovery on its own.
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These days, biotech reverse mergers usually involve a concurrent financing to support the company. Biotechs struck 11 reverse-merger deals in the first half, compared with five in all of 2025, according to investment bank William Blair.
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Not long ago, reverse mergers were stigmatized as two weak players leaning on each other. Startups resorted to them when the initial public offering market was frozen. Now, reverse mergers are rising even as IPOs rev up. Fourteen biotechs staged IPOs in the first half, up from eight in all of 2025, according to William Blair. Entrepreneurs and investors are changing their view of reverse mergers as market dynamics burnish their appeal.
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100%
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The tariff President Trump said on Truth Social that he would impose on generic medicines in August 2028 if drugmakers don't move manufacturing plants to the U.S.
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Shares in Generic-Drug Makers Fall After Trump’s Tariff Plan
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Shares in several European and Asian makers of generic medicines fell after President Trump said the U.S. would place tariffs on such drugs starting in August 2028. Trump wrote on his Truth Social platform that he would give two years for drugmakers to move plants to the U.S. before introducing the levies, starting at 100% from August 2028 for one year before increasing them to 200%. In response, the Indian Pharmaceutical Alliance, a trade body, said tariffs alone wouldn’t lead to sustainable onshoring to the U.S. of generic-medicine production, and that a set of reforms would be needed to attract major new domestic investments.
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Funds
Palo Alto, Calif.-based Tau Ventures is raising its Fund III to continue making seed investments in startups developing AI-driven technologies across healthcare, enterprise and automation.
People
Talawar Therapeutics, a developer of antibodies for immunology and inflammatory diseases, appointed Steve Migausky as chief legal and administrative officer. He was previously chief legal officer at Cardurion Pharmaceuticals.
Formation Bio, a startup building technology and AI systems to accelerate drug development and clinical trials, appointed Michael D. Ehlers as chief scientific officer and head of research and development. He was previously an entrepreneur partner at MPM BioImpact.
Unnatural Products, a developer of orally-delivered macrocyclic peptides to address previously undruggable targets, named Neera Ravindran as chief financial officer. She was previously CFO of Kriya Therapeutics.
Assort Health, an AI agents platform for patient journeys, named Jon Corn as chief revenue officer, Kristina Kemp as vice president of customer success and Emil Yeargin as senior vice president of people.
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Candid Health, a San Francisco-headquartered autonomous revenue cycle management platform for healthcare, scored $120 million in Series D funding. Sixth Street Growth led the investment, which included participation from Oak HC/FT and others.
TYBR Health, a Houston-based startup developing products designed to improve healing and recovery following surgery, secured $30 million in Series A funding led by Vensana Capital and Mutual Capital Partners. Greg Banker of Vensana and Liz Todia Zambory of Mutual will join the company’s board.
Inner Logic, a Baltimore-based startup enabling manufacturers to design, test and validate medical devices across virtual patients before physical testing, was seeded with an $11.5 million investment co-led by General Catalyst and Bison Ventures.
Tikva Allocell, a Singapore-headquartered startup developing engineered, allogeneic cell therapies for patients with solid tumors, closed an $8 million Series A round led by Kantharos Capital.
Cheiron, a Los Altos, Calif.-based startup building an operating system for drug programs, landed $8 million in seed funding. Menlo Ventures led the round, with Partner Venky Ganesan joining the company’s board.
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LUCY JONES FOR WSJ
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