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Scientific Highlights from 2020’s Drug Discovery Biotech IPOs

Recently, our team at Drug Hunter compiled the lead programs and mechanisms of small molecule and large molecule biotechs that IPO’d in 2020. We asked featured reviewers from our community what stood out to them about the science of this group of companies, and here are some highlights that emerged from the discussion. Any thoughts and comments shared are personal opinions only and are not endorsements of companies or representative of any employers.

Large Molecule IPO Highlights

New Antibody-Drug Conjugate (ADC) Modalities

A number of antibody-drug conjugate programs caught reviewer Dian Su’s attention, including antibody-oligonucleotide conjugates (AOCs) DM1 AOC and AOC 1001 ($DYN, $RNA). “Oligonucleotides are a fairly new type of payload, with a very different size and mechanism of action compared to conventional payloads (e.g. small molecule tubulin-binders or DNA alkylators).” It was also interesting to see these antibody conjugates explored outside of cancer, where early ADC development has typically focused.

The Dyne AOC, DM1, has a single-stranded antisense oligonucleotide (ASO) payload which targets toxic nuclear DMPK RNA in muscular dystrophy. The ASO is conjugated to an antigen-binding fragment (Fab) that binds the TfR1 receptor on muscle cells, leading to receptor-mediated endocytosis and release of the ASO from endocytic structures and degradation of pathological DMPK RNA in the nucleus. 

Avidity AOC, AOC 1001, is similar to DM1 in that it targets TfR1 and DMPK RNA, but does so with a double-stranded siRNA payload and a full monoclonal antibody (mAb). Interestingly, this is an example of siRNA being successfully employed in vivo and in patient-derived cells for a target in the nucleus. Until recently, siRNA was assumed to be only active via the cytoplasmic DICER/RISC complex of mammalian cells.

Both programs will be interesting proofs-of-concept for the new AOC class and will help address unanswered scientific questions such as whether AOCs provide a better therapeutic index over naked oligonucleotides than ADCs provide over small molecules. General medicine reviewer Ron Lithinks new therapies for neuromuscular diseases would be exciting if successful (e.g. $DYN, $RNA, $ANNX). “Neuromuscular diseases such as myotonic dystrophy and neurodegenerative diseases are relatively rare, but devastating when they do occur and do not have any great treatments available. Right now it’s mostly supportive treatment for most of these conditions.”

For further reading on oligonucleotides and myotonic dystrophy, here is a great review on oligonucleotide drug delivery, here is a great review by Stanley Crooke on cellular uptake and trafficking of ASOs, here is a key precedent for targeting nuclear RNA for correction of myotonic dystrophy, and here is a recent open-access article on myotonic dystrophy drug development.

Conditionally Active Biologic (CAB) ADC BA3011 also caught Dian’s attention. CABs pursued by BioAtla are optimized for activity at the lower pH of tumor microenvironments (TMEs) vs. normal physiological pH, theoretically leading to a wider therapeutic index. Though pH-dependent drug activity/delivery has been observed preclinically for various modalities including small molecules (recent STING examples here), few clinical attempts to translate this concept have been made. It will be interesting to observe whether BA3011 demonstrates a significantly greater therapeutic index over Axl inhibitors, given that the small molecule warheads contribute significantly to the overall tolerability of ADCs.

Oral Proteins and Stabilized Large Molecules

Some large molecule drugs were noteworthy for their surprising stability to both Structural Biology reviewer Yoana Dimitrova and DMPK reviewer Dian Su. Applied Molecular Transport’s AMT-101, for example, is an oral fusion protein of IL-10 and a cholix domain from Vibrio cholerae for treatment of inflammatory bowel diseases. The cholix domain helps the protein cross the intestinal epithelial barrier to interact with immune cells in intestinal tissue. Enteric coated capsules help the protein survive the stomach to reach the ileum. While enteric coating has long been used for small molecule delivery, it is interesting to see it applied for a large molecule drug.

The Aligos antiviral synthetic oligonucleotide polymer, ALG-010133, like many other oligonucleotide drugs, incorporates sulfur into the phosphate backbone to increase plasma stability and bioavailability. The phosphorothioate oligonucleotides naturally accumulate in liver hepatocytes, an advantage for targeting hepatitis B. ALG-010133 is based on REP-2139 with 2 additional modifications. Interestingly the oligonucleotide aptamers appear to act on protein targets (likely host factors) rather than oligonucleotide targets.

Re-emergence of Interleukins

Yoana also found the (re-)emergence of interleukin-based drugs to be interesting, including IL-2-based PT101, IL-10-based AMT101, and Codiak’s exosomal IL-12. Each is structurally different: PT101 is an IL-2 mutein fusion, AMT-101 (discussed above) is a cholix-IL-10 fusion, and exoIL-12 is a fusion with an exosome transmembrane protein PTGFRN. Pandion’s PT101 (already acquired by Merck) suppresses inflammation by activating and expanding regulatory T cells without activating or expanding other cell types by selectively binding in a high-affinity complex. exoIL-12 on the other hand, is intended to activate immunity against tumors with more controllable toxicity relative to systemic administration or other methods of local administration.

mRNA Vaccines

Finally, given the pandemic, it was not surprising to see an mRNA-focused company, CureVac, as the most valuable company on the list. However, we doubt that anyone would have predicted in 2019 that mRNA developer BioNTech SE, already a $3B company then, would be worth nearly 30x more a few years later. Beyond Covid-19, mRNA vaccines are actively being pursued for infectious diseases including HIV (e.g. Argos Therapeutics), Zika, and Influenza virus (Moderna), cancers (e.g. Argos and BioNTech), and mRNA-based drugs are being investigated for several rare protein deficiencies. It will be interesting to watch whether mRNA-based therapies continue to stand out in other disease areas vs. other modalities, given the uniqueness of the pandemic’s time-pressure for development.

Small Molecule IPO Highlights

Among small molecule IPOs’ research programs, two were particularly interesting to reviewers for different reasons. Both Anthony Vaganos and Joachim Rudolph found the PMV Pharmaceuticals mutant p53 reactivator interesting, given how difficult it has been to directly or indirectly target p53. p53 is sometimes called the “guardian of the genome,” and is a key tumor suppressor that is dysfunctional in many tumors. Attempts to activate wild-type p53 in tumors to promote apoptosis indirectly, such as via MDM2 (e.g. AMG232 or idasanutlin) or USP7 inhibition, have been challenged by safety issues. 

Aprea Therapeutics, a 2019 IPO with a p53 reactivator of a different mechanism, was also given a clinical hold earlier this year due to toxicity concerns. Joachim points out, however, that “it has been known for a while that [the Aprea compound PRIMA-1, a covalent binder] has partial p53-independent effects, possibly because the released warhead is quite reactive.” PMV’s p53 Y220C activator (PC14586), a reversible binder, might be more selective, and it will be interesting to see if it demonstrates durable efficacy clinically. “The Y220C mutant is ideal for drug binding and stabilization since the tyrosine residue in WT p53 occupies a pocket that is vacant in the Y220C mutant and well ligandable.” While the Y220C mutant isn’t the most prevalent p53 mutant, and it remains to be seen if analogous stabilization approaches can be applied to other p53 mutants, the clinical trial with a Y220C stabilizer will be an important proof-of-concept study in the field.

Another company and lead program that stood out to reviewer Christian Kuttruff was Schrodinger and its MALT1 inhibitor program. “In the past, most people probably only knew [Schrodinger] from their software (e.g. Maestro), and I was quite surprised to hear about them starting to build their own pipeline.” Notably, Schrodinger was also the only new holding added to the Bill & Melinda Gates Foundation’s portfolio (2020Q1 13F) and remains the only biotech listed in their portfolio (2021Q2 13F). MALT1 is a target that large companies such as Novartis have worked on in the past but seem to have stopped work on, despite high quality chemical matter (e.g. Molecule of the Month allosteric inhibitor MLT-985). It will be interesting to someday hear about Schrodinger’s choice of targets and learn how Schrodinger’s computational strengths are leveraged against them. Partnerships with Schrodinger have helped many companies to succeed in the past (including a company it co-founded, Nimbus Therapeutics), which is a good sign for its internal efforts.

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Oral Small Molecules Among 2020’s Drug Discovery Biotech IPOs

In general, it was good to see so many oral options being taken forward by new companies. Ron Li, a Stanford attending physician and professor of medicine, was encouraged to see a many oral options being developed for advanced leukemias and lymphomas (e.g. $SDGR, $CCCC, $KRON, $FMTX, $FHTX). “These hematologic malignancies typically confer high morbidity/mortality and current typically traditional “shotgun” approach chemotherapeutic agents that result in high rates of AEs, complications, and significant utilization of medical resources given the high hospitalization rate among treatment individuals. Relapsed disease also becomes significantly harder to treat, so targeted therapies (particularly oral agents that don’t require infusions) are greatly needed in general.” 

Patients with acute leukemia are hospitalized regardless of initial or relapsed disease because the disease progresses very rapidly and the chemo regimens are particularly toxic. “I can imagine a targeted, less toxic oral therapy can potentially be administered after discharge when the disease and blast counts have stabilized. Patients are often hospitalized for prolonged periods of time due to complications from chemo rather than the disease itself.” CNS-penetrant compounds such as Forma Therapeutics’ CNS-penetrant mIDH inhibitor are also particularly interesting as few drugs are available for CNS AML. 

While there is an incredibly heterogenous group of other cancer types being studied, “in general our experience has been that oral targeted inhibitors are great options (and overwhelmingly preferred by patients and providers) when they work, so there is a lot of opportunity there.”

Beyond cancer, the search for an effective oral antiviral for Covid-19 (e.g. AVIR) stood out. “An effective oral antiviral would be significant in my opinion,” Dr. Li says, “since it would massively increase our ability to treat Covid at scale and decrease need for hospitalizations, which is one of the main reasons why Covid surges are particularly dangerous.”


Overall it was scientifically fascinating to browse through the science of 2020’s class of drug discovery biotech IPOs and see so many interesting new modalities, targets, and development strategies. Though concerns about valuations both in public and private markets continue to mount, there’s certainly good reason for enthusiasm with a lot of interesting science underlying many new companies. Some things are different this time both structurally and scientifically, and with no signs of global negative real interest rates rising, who knows how much longer this record-long 8-year IPO window will continue to run? All that’s certain is South San Francisco is a lot more interesting now than it was when The Cove was just a parking lot.

Thanks to team member Jen Huen for research assistance on the Large Molecules section of this article. 

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