The JDRF T1D Fund’s investment in ImmunoMolecular Therapeutics this week is the latest example of how the venture philanthropy fund is leveraging new insights around autoimmune biology and the fund’s growing capital base to expand the scope of the fund.
Not only is the fund looking to attract VCs and companies outside of Type I diabetes to invest in the indication, it is now helping diabetes companies broaden their research remit to attract new sources of venture money.
T1D Fund Chairman Sean Doherty told BioCentury that a better understanding of immune biology mechanisms shared across autoimmune diseases and even cancer has allowed the fund to seek out companies with technologies that can either be redirected to Type I diabetes, or expanded from Type I diabetes to other indications.
“Three years ago, there were almost no venture capital firms investing in Type I diabetes,” Doherty said.
The ImmunoMolecular deal, a $10 million series A round that the T1D Fund co-led with Morningside Ventures, is an example of the latter. Founded by academics from the University of Colorado, the company originally focused on an oral small molecule to block HLA variant DQ8 from binding and presenting endogenous insulin to the immune system, which in turn could prevent the activation of a T cell immune response against the antigen in Type I diabetes (see “D over L for Diabetes”).
“With our encouragement, we’ve expanded the business plan to include celiac disease,” Doherty said. “We’ve taken a Type I diabetes-only company, and are encouraging it to become something more than a Type I diabetes only company. Why would we do that? Because we want to help them get financing.”
According to ImmunoMolecular, the DQ8 peptide is present in about 60% of Type I diabetes patients and about 10% of celiac patients. A second program targets HLA variant DQ2, which is present in nearly all celiac patients.
The fund has made investments in companies going in the other direction by taking a technology and redirecting it to Type I diabetes, Doherty said.
The biggest value-add for the fund, he said, lies in companies that cross autoimmune diseases.
“A majority of our portfolio are companies that were looking at autoimmune diseases, where we had identified the science of similar biological pathways among those diseases,” Doherty said. “In those cases, either with the help of our VC partners, and sometimes just by approaching these companies, we’ve convinced venture-backed companies that are already an existing model to add Type I diabetes as a second or third indication.”
SQZ Biotechnologies Co., which is developing engineered antigen-presenting cell therapies, is one such example. While the company’s lead programs aim to treat cancer by engineering cells to attack a target of choice, he said that the company was also looking to develop the platform in the other direction -- to tolerate or protect targets of choice in autoimmune settings.
The T1D Fund invested in SQZ’s $72 million series C round last year, and SQZ has started a preclinical program, TAC-T1D, in Type I diabetes.
The fund officially launched in early 2017 with $32 million in backing from JDRF. Since then, the fund has raised nearly $50 million in private donations, according to Doherty.
With returns from two exits thus far -- the IPO of Provention Bio Inc. (NASDAQ:PRVB) and the sale of cell therapy play Semma Therapeutics Inc. to Vertex Pharmaceuticals Inc. (NASDAQ:VRTX) -- he told BioCentury the fund now has about $100 million under management.
The fund invests in about 5-10% of the deals it evaluates, a rate similar to that of other life sciences VCs, Doherty said. Opportunities that aren’t ready for investment are directed to JDRF, which can provide non-dilutive grants to help companies mature to the point where a viable commercial opportunity could warrant VC investment.
The majority of the T1D Fund is earmarked for companies developing therapies that could be disease modifying; however, the fund has invested in companies developing products such as better continuous glucose monitoring systems.
“The thrust of the portfolio over time will be disease-modifying therapies,” Doherty said. “You need to stop or reverse the immune attack, and you also need to have a way to replace those lost beta cells.”
He said the fund is also hoping to start doing company creation based on translational science out of academic centers.
ImmunoMolecular is the T1D Fund’s fifteenth investment to date.