Tome Biosciences, a high-profile gene editing startup spun out of MIT, is halting its lab work and looking to sell itself or find a partner to continue developing its technology, CEO Rahul Kakkar told Endpoints News in an interview. At least three companies “very familiar with the editing space” are in discussions with Tome, he said.
The startup was at the vanguard of an emerging field of genetic medicines designed to precisely insert entire genes into cells. The method promised to provide a nearly universal solution for treating genetic diseases and give scientists a powerful tool for creating cell therapies with supercharged abilities to fight cancer and autoimmune disease.
But despite raising $213 million across two funding rounds, the three-year-old startup is running out of money. Since January, Tome has tried, and failed, to raise a third large round of funding needed to finish preclinical tests. It’s also failed to find a partner interested in one of its two lead programs: cell therapies for autoimmune diseases and an in vivo therapy for a rare metabolic disease called phenylketonuria.
Rahul Kakkar“Fundraising has been challenging,” Kakkar said. He added that the company is shifting its focus to “deal negotiations rather than active operations,” and that its remaining scientists will focus on preparing data packages for future regulatory review and writing scientific publications — something the company hasn’t done yet.
Tome’s struggles, first reported by STAT News, come less than nine months after its formal launch in December, when it had about 150 employees. Kakkar told Endpoints that there are about 130 people at the company today. The company made targeted cuts in June, but Kakkar wouldn’t say if more layoffs are coming in the days ahead.
“With the runway we have left, individuals are going to start looking for new opportunities and new employment,” Kakkar said. “That’s very natural when you’re in a very uncertain period as a company, when you’re approaching the end of your cash runway.”
STAT reported that the company may only have until Nov. 1 to find a buyer or shut down, a tight timeline that Kakkar denied. He wouldn’t say how much cash the company has left, but he insisted that the company’s technology, patents and pipelines were not the source of its problems.
Instead, he blamed a general souring of investor sentiment toward gene editing companies at large. The stocks of the six biotechs focused on CRISPR gene editing have fallen between 25% and 65% since the beginning of 2024. Despite that, Kakkar had hoped that the company’s first data showing that its approach works in monkeys, presented at a conference in May, would reignite investor interest.
“We were bullish that even with a downturn — not just in biotech, but a downturn in interest in editing companies specifically — that we would still be able to garner interest from investors that really understood the space. Unfortunately, that proves to be incorrect,” Kakkar said.
If Tome’s gene insertion technology is ever tested in humans, it will likely be in the hands of another drug developer.
It’s an unexpected twist for a company that earlier this year was confident enough to acquire its own tiny gene editing firm, Replace Therapeutics, in a deal worth up to $65 million in upfront and near-term payments. Now, Kakkar thinks Tome’s purchase was a sign of more consolidation still to come in the gene editing field.
“If you had gone back a couple years, I do wonder if Replace could have been a big build on its own,” Kakkar said. “But it was not in a position to be able to do that.”
‘Investor sentiment was shifting’
Tome was quietly founded in 2021 by Omar Abudayyeh and Jonathan Gootenberg, up-and-coming scientists from MIT who got their start in CRISPR pioneer Feng Zhang’s lab. In their own lab at the university, the pair developed a gene editing tool dubbed PASTE, which they debuted in a preprint that November.
While older tools were good at breaking genes or fixing small typos, PASTE could “drag-and-drop” big chunks of DNA, even entire genes, into precise locations. It was a near panacea, and Tome billed it that way.
John Finn“Once you can put in any sequence of any size, what’s the next tool that you would need?” chief scientific officer John Finn told Endpoints in December. “This is really the final chapter in genomic medicine.”
But questions arose about how similar PASTE was to another technique called prime editing, which Broad Institute scientist David Liu had also shown could be used to insert large swathes of DNA. Tome has insisted its technology is unique and that concerns about patents were not a factor in its inability to raise new funds.
When Kakkar was recruited to lead Tome in September 2021, he wasn’t a known entity in the gene editing field, but he was a proven dealmaker. Just six months earlier, he sold his cancer biotech Pandion Therapeutics to Merck for $1.85 billion — at a 134% premium.
After closing its Series A funding round that fall, Tome rapidly grew in 2022. But when Kakkar began seeking the startup’s next funding, he faced headwinds. After two years of easy money, funding was drying up for private biotechs, especially ones still several years away from clinical trials.
“Investor sentiment was shifting, and it was shifting quickly,” Kakkar said.
The company’s Series B, closed in the third quarter of 2023, was smaller than Kakkar had wanted. As it became clear that further funds would be a struggle, the company began making targeted spending cuts, including in new gene insertion approaches and new delivery methods.
In May, the company provided the first glimpse of how its gene insertion technology was working. An infusion of an experimental therapy was able to insert a gene in about 10% of liver cells in a monkey. The company has since improved the technology and achieved “mid-double-digit editing,” Kakkar said, a level that is “well beyond what we need to cure some of the diseases we’ve been planning to go after.”
All year, the company has tried to raise between $120 million and $180 million in a Series C round for the company’s IND-enabling studies and GMP manufacturing that would be needed before it can ask regulators to begin a clinical trial. The money never came.