Monte Rosa Therapeutics CEO Markus Warmuth expects molecular glues to make up a new class of drugs with “almost unlimited potential” in the long run, allowing scientists to tackle disease-causing proteins considered out of reach.
“As we can take out undruggable proteins, there’s almost no limit to where we can take the technology,” he said in an interview with Endpoints News.
Warmuth’s biotech faces real-world constraints in realizing those sky-high hopes. But on Tuesday, the Boston-based startup took a modest step toward seeing his vision play out as it closed a $100 million follow-on raise led by Dimension, a new biotech venture capital firm, and an undisclosed life sciences investor.
“I would call this a momentum raise rather than driven by data,” said Warmuth, adding that the financing wasn’t centered on a data readout or research result.
The deal also shows the tough reality of today’s biotech market, which has remained far off of 2021’s highs. Monte Rosa went public in the heart of the boom days, with an IPO debut in June of that year at $19.00 per share. In the recent raise, Monte Rosa sold shares at about one-fourth of that price, for $4.70. The company now commands a market capitalization of roughly $250 million.
Zavain Dar, a managing partner and co-founder at Dimension, said its investment in Monte Rosa wasn’t about the cheap valuation. Instead, the company’s potential to expand molecular glues as a modality attracted his investment.
Zavain Dar“We’re not cigar butt hunting,” Dar said. “We’re long-term investors. We’re not day traders. We’re building this company with a seven- to 10-year vision, not a six-month to 18-month vision.”
The cash infusion extends the biotech’s runway into the first half of 2027, Warmuth said. That’s likely sufficient to get to clinical proof-of-concept readouts for three glue programs: its lead drug, now in the clinic to treat MYC-driven cancers, and two preclinical candidates targeting VAV1 for autoimmune diseases and NEK7 for inflammatory diseases. The company expects to file a new drug application this quarter for its VAV1 program, Warmuth said.
Monte Rosa, which was started in 2018 by Versant Ventures, has now raised roughly $625 million. According to its latest proxy filing, the company’s major backers include Versant, NEA, Fidelity, Baker Bros. Advisors, Avoro Capital Advisors and T. Rowe Price.
First glue progressing in the clinic
The biotech dosed the first patient with a molecular glue targeting the GSPT1 protein in MYC-driven cancers in late 2022 and reported early clinical results last year.
Three patients given a 2 mg dose of Monte Rosa’s drug experienced grade 4 side effects, which are considered life-threatening or disabling, but the results also demonstrated preliminary signs of efficacy.
Wall Street analysts and investors are closely watching the safety data surrounding that program, as toxicity concerns have tripped up previous attempts targeting MYC, a common culprit of cancer.
Monte Rosa is one of a handful of startups developing molecular glues, or small molecules that slip into cells and glob onto a disease-causing protein. That process then attracts another protein to join, triggering a cellular process that ultimately destroys the protein. Other molecular glue-focused startups include Triana Biomedicines, Magnet Biomedicine, Plexium and A-Alpha Bio. Clinical-stage startups working on related protein degradation approaches include Arvinas, Kymera Therapeutics and C4 Therapeutics.
There’s no doubt that glues can be major medicines and turn into big business. The cancer drug Revlimid, now sold by Bristol Myers Squibb, falls into this class, though the mechanism of action wasn’t published until 2015.
Monte Rosa’s key challenge will be showing it can find the next Revlimid on purpose instead of by accident, and that glues can become as customizable and controllable of a platform as RNA interference or messenger RNA.