Leto Laboratories, a company on new drug (protein-based drug) development, completed Series B financing of over $15 million for clinical development of cytokine drugs
Published: October 16, 2020
October 12 (EqualOcean)- Leto Laboratories Co., Ltd. (“Leto Laboratories”) today announced it has completed a $15+ million Series B funding round, invested by Yijing Capital, Qiaojing Capital, and Beijing Changping Science Park Development. Instant Capital was the exclusive financial advisor.
Founded in December 2014, Leto Laboratories is a platform company specializing in developing recombinant protein drugs such as cytokine-based ones. Its founder, Dr. ZHANG Wei, has years of experience in drug development and management at Novo Nordisk, and its team, consisting of a number of senior scientists who played key roles in the R&D department of renowned domestic and international pharmaceutical companies, made great contributions in developing Semaglutide, Somapacitan and PD-1 antibody approved by FDA and NMPA in recent years.
Prior to this funding, Leto Laboratories has received investments from Sherpa Healthcare Partners, Med-Fine Capital, Qirong Venture Capital, and Hygeia Capital. This funding, as reported, is going to be used for the preclinical pharmacology and toxicology studies of the long-acting anticancer cytokine- based drugs, and phase I and II multi-center international clinical trials.
In recent years, domestic companies increasingly demand substitute of key imported protein raw materials and introduction of molecules for innovative drugs, as biologic drugs are becoming more important, and as China releases policies encouraging innovation and originality. On the other hand, Chinese patients have also been longing for local innovative drugs with good efficacy and quality. Hence, we believe some biotechnology companies possessing key technology and innovation capabilities will emerge and rise, growing into pillars of the industry.
Leto Laboratories owns the exact key technology fitting for developing polypeptide and small proteins pipeline (i.e., cytokines) and for manufacturing of protein raw materials, which is the directional protein refolding. It can tailor design the process and technology for each stage of work, for example protein expression by bacterial strains, refolding formulation, dosage form development etc., according to the protein properties. It has accomplished process development and scale-up for a number of strategic partners. As its team grows bigger, with its unremitting efforts, Leto Laboratories has been improving its platform technology system for eukaryotic expression, and has developed some competitive cytokine and enzyme-based drug pipeline that requires difficult-to-handle process.
According to Dr. ZHANG, Key& Core Technology barriers in any industry are actually barriers imposed by patent protection and process technology, while Leto has developed its own competitive advantages over the years. Relying on the eukaryotic& prokaryotic platforms and its protein engineering design, Leto has formed a special drug pipeline with high potential, some of them having been licensed to listed pharmaceutical companies; many of its projects are also under PCT protection. Thus, we believe Leto Laboratories will bring more innovations to the market in the future.
As the company grows, Leto Laboratories is licensing out some target molecules and pipelines at different phases. “it’s similar to what chip design companies do as a business model, such as ARM. American Biotech firms also do so. This diversified development can secure a steadier growth on the drug innovation track.” Dr. Zhang said.
Underpinned by its protein platforms, Leto Laboratories has currently entered into strategic cooperation with some well-known pharmaceutical companies, such as TONGHUA DONGBAO PHARMACEUTICAL and TopAllinace. In particular, Leto Laboratories and TopAllinace signed “Technology License Contract for an IL-2 Drug with Unique Intramolecular Disulfide Bonds” in August, in which TopAlliance is exclusively licensed for the preclinical development, clinical research, and commercialization of this IL-2 drug (LTC002) and for the use of related patented technology worldwide.
As agreed, TopAlliance will make a prepayment of $3.29 million to Leto Laboratories and will pay no more than $147.17 million in total for milestone payment and technical service fee as pre-marketing development, launch, and post-marketing sales of this drug move along. In addition, TopAlliance will pay Leto Laboratories a sales commission at an agreed percentage on the net sales revenue starting from LTC002’s commercialization.
“We are grateful to our strategic partners and investors for their trust in and recognition to our technology and team.” According to Dr. Zhang, Leto Laboratories will try to extend its reach to the mid- and downstream of the industrial chain relying on technology licensing and independent development. It hopes to open a unique but fitting path in the non-antibody protein drug track (i.e., cytokines or polypeptides), and become a biopharmaceutical enterprise encompassing R&D, manufacturing, and sales.
Yijing Capital, the lead investor of this funding round, commented that, “We invest in innovative technologies in the medical field and make this our long-term endeavor. We believe Leto Laboratories can make groundbreaking progress in immunotherapies against cancers, because it has a team of top scientists specializing in protein. They show great creativity in developing protein-based drugs, especially in its modified interleukin pipeline. Yijing Capital would love to provide as much support to Leto’s development as possible through its capital strength and industrial resources. It looks forward to the day when Leto’s new drugs are marketed to benefit patients.”
Qiaojing Capital said, “Leto Laboratories’ molecule design, protein technology and patents for the self-developed IL-2 and IL-15 projects are high barriers to entry. What we also value is its team consisting of scientists from Novo Nordisk. They master the core technologies in developing protein drugs ranging from structure design, purification and dosage form development etc. Adding its complete technology platform, Leto Laboratories can produce a broad R&D pipeline in the future. The strategic cooperation with TopAlliance, TONGHUA DONGBAO, Qilu Pharmaceutical and other pharma giants is also clear and convincing evidence of its strong technological and R&D capabilities.”
WANG Ying, General Manager of Changping Science Park Development, also made a comment, "Protein is to living beings what the chip is to computers. It is the most fundamental aspect for the development of biopharmaceutical and in vitro diagnostic (IVD) enterprises. Leto Laboratories’ team has over 10 years’ experience in this sector, having the know-how for key steps in developing protein products such as structure design, expression, purification etc. Besides, Leto has built cooperation with many IVD and big pharma companies, and is advancing its own product pipeline which holds leading position in China. Therefore, we are optimistic about its future, and are happy to build a closer partnership with Leto Laboratories by making investment. We’d also like to facilitate its future growth by providing policy services, investments or other forms possible.
CAI Daqing, the Managing Partner of Sherpa Healthcare Partners, an early-stage investor of Leto Laboratories, said, “Protein drugs developed by protein engineering, such as cytokine-based drugs, play a very important role in immunotherapies against cancers and in treating serious illnesses such as autoimmune diseases. Nowadays rapid progress has been made in developing such drugs in the world, and strong interest and fierce competition has been stirred up given their increasing efficacy. They’ve been included in product pipeline of international pharma giants as an indispensable part, alongside with the immune-oncology drugs. Considering there is great prospect for the development of protein drugs and protein engineering in China, we believe Leto Laboratories is going to make great progress and admirable accomplishments in new drug innovation because it has a very capable R&D team.”
Founded in 2015, Yijing Capital make equity investment in primary market and FOF investment with its own capital and PE funds. It aims to help companies innovate and grow, facilitate industrial optimization and upgrading, and promote social development and progress. It focuses on areas like medicine& healthcare, TMT, intelligent manufacturing and so on, and prefers companies at launch and growth phase that create high values and are capable of scientific and technological innovations. Medical & healthcare companies Yijing Capital has invested in are OUR UNITED CORP., SS Innovations, WELLEM, eTheRNA, MedSci etc. They stand at leading positions in their segmentations.
Qiaojing Capital specializes in early-stage investing in medicine& healthcare, focusing on medical devices, biological diagnosis, and service innovations. For medical devices, it invested in companies for high-value cardiovascular consumables such as Tianzhu Ruichang (AngelReach) (aortic stent graft), Cryofocus Biotech (cryoballoon ablation for the treatment of atrial fibrillation). For biological diagnostics, it facilitates the growth of SpaceGene (precision cancer diagnostics), CYGNUS BIOSCIENCES (NGS platforms), Conlight Medical (psychiatric pharmacogenomics) and companies alike which are well-known in their segmentations. For innovative services, Qiaojing Capital made investment in high-potential companies such as Oranger (chronic respiratory disease management), INNOSTIC (high-value consumables distribution), and KEXIN Med (family centered maternity and newborn care). It sticks to value investing in companies meeting clinical needs, and is committed to nurturing new technologies in medical field to provide better clinical solutions and advancing medicine& healthcare development.
【Beijing Changping Science Park Development】
Beijing Changping Science Park Development is a one-stop platform to invest in and operate businesses subject to industrial ecosystem concept. It was founded by Changping District government in Beijing. Over the years, it has been deeply involved in medical and health care industry, having created a number of professional service platforms such as the shared platforms for instrument& equipment and testing services, third-party medical labs, and CMO platforms for medical devices etc. In addition, it makes full use of the Fund of Funds (FOF) and partnership fund to expand its reach in medical and health care sector. Its FOF has invested in more than 200 medical and health care companies, amounting to nearly 7 billion RMB. Changping Science Park Development also sets up direct investment funds particularly for this sector with its own capital, and its investment goes to various technological frontiers. Some of such companies have joined the league as publicly listed companies, for example Eyebright, INNOCARE, and GENETRON Health.
【Instant Capital 】
Instant Capital is a new investor bank dedicated to pharmaceuticals, medical devices and diagnostics, and biotech sector. It is specialized in capital operations for companies at different phases, ranging from launch phase to IPO. Instant Capital has the capacity to provide a full spectrum of services, providing industrial resources, helping build business connections with investors, and offering values in corporate governance, risk control and compliance, strategic planning, public relations etc.