Flush With New $150M Investment, Avenzo Pursues Licensing Strategy
03 Apr 2024
License out/inAcquisitionADC
Pictured: Photo illustration featuring Avenzo Therapeutics CEO Athena Countouriotis/ Nicole Bean for BioSpace
Having completed an oversubscribed $150 million Series A-1 funding round, Avenzo Therapeutics is looking to add at least one new cancer-focused asset in the next year, CEO Athena Countouriotis told BioSpace. The company will not be conducting in-house drug discovery, but rather licensing clinical-stage or near-clinical-stage compounds from other companies.
It is a deliberate strategy undertaken by the startup, whose executives learned from their experience leading Turning Point Therapeutics, which Bristol Myers Squibb bought for $4.1 billion in 2022. Countouriotis recalled that it took Turning Point about three years from the start of discovery work to dosing of the first patient. Avenzo has an active clinical trial of an in-licensed product less than a year and a half after the company’s founding.
“Rather than doing all of that inherent growth [here at Avenzo], we decided we would look for in-licensed assets,” said Countouriotis, who was president and CEO of Turning Point at the time of the BMS acquisiton. She and former Turning Point Chief Medical Officer Mohammad Hirmand started San Diego–based Avenzo in October 2022.
It is a rather unique approach for a startup, Solon Moreira, assistant professor of strategy and entrepreneurship at Temple University’s Fox School of Business, told BioSpace. “You see so many smaller companies out-licensing to Big Pharma,” Moreira said. Avenzo “got our attention because that’s not as usual.”
Avenzo currently has about 15 employees, more than half of whom are supporting the trial, Countouriotis said. But while the approach may be uncommon, it’s one investors appear to be on board with. Avenzo originally sought to raise $45 million in this add-on round, but the company ended up with more than triple the original goal.
The First Asset
In January, Avenzo paid $40 million to license a CDK2 inhibitorCDK2 inhibitor from Allorion Therapeutics. The deal includes an exclusive option to purchase a preclinical program with an Investigational New Drug (IND) submission planned for early 2025.
The compound, now dubbed AVZO-021, is in a Phase I/II study including patients with HR+/HER2- metastatic breast cancer and other advanced solid tumors. Countouriotis told BioSpace that dosing has begun in about five patients.
This trial has multiple components. AVZO-021 will be tested as a single agent and in combination with the three currently approved CDK4/6 inhibitors for breast cancer: Novartis’ Kisqali, Pfizer’s Ibrance and Eli Lilly’s Verzenio. Countouriotis said there will “likely” be a combination with an antibody-drug conjugate (ADC) before Phase I wraps up.
While still in stealth mode last year, Avenzo raised nearly $197 million in its Series A round. The A-1 brought the company’s total fundraising to $347 million. With the new haul, Countouriotis expects to double the headcount to 30 in the next 12 months.
“It’s going to be probably mostly R&D, and it’s going to be folks that are much more on the D than the R,” she said.
Thomas Klueter, professor of entrepreneurship at IESE Business School in Barcelona, Spain, said the founders of Avenzo likely realized that their competencies were in managing clinical development rather than developing breakthrough compounds. The Turning Point–BMS connection also helped.
“What were the incentives for [AllorionAllorion] to license this molecule, which was already in Phase I, to an Avenzo?” Klueter wondered. “It has to be with the credibility of the founders, which also enabled them to convince investors.”
Future Plans
The Series A-1 raise provides working capital for two to three years, according to Countouriotis, though the company expects to spend much of that money on a new compound within a year.
She added that the goal is to strike another licensing deal in the next 12 months and a third by early 2026, both for clinical-stage assets. Avenzo also wants to go public in the next two years, Countouriotis said.
Within five years, Countouriotis would like Avenzo to have enough data to bring a New Drug Application to the FDA.
The company has no plans to expand beyond oncology because that has been the career focus of founders Countouriotis and Hirmand, who have collectively brought 11 cancer drugs to market, Countouriotis said.
Neil Versel is the business editor at BioSpace. You can reach him at neil.versel@biospace.com. Follow him on LinkedIn or X.
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