A brain biotech launches with Roche’s spare parts
A startup focused on brain drugs officially launched Thursday, backed by $94 million from a group of investors that includes one of the world’s largest banks and the parent company of Ozempic maker Novo Nordisk.
Boston-based Newleos Therapeutics hopes to develop new treatments for a broad range of mental health conditions. The biotechnology company’s pipeline, which it licensed from Swiss pharmaceutical giant Roche, has four drugs in human testing for conditions like generalized anxiety disorder, substance use disorder and cognitive impairment.
The drugs are designed to regulate different molecules and proteins involved in brain cell communication. The most advanced has completed Phase 1 studies, and is being evaluated as a treatment for a rare, genetic neurodevelopmental disorder.
The Longwood Fund, a venture capital firm that’s invested buzzy biotechs like Grail and Bicycle Therapeutics, got Newleos off the ground. Three members of the Longwood team — Executive Partner David Donabedian, Senior Adviser William Martin and Associate Michael Miguel Sobral — co-founded Newleos, and serve, respectively, as the company’s CEO, chief development officer, and head of strategy and operations.
Federico Bolognani, a physician-scientist who held leadership roles in the research arms of Roche, VectivBio and Therachon, is also a Newleos co-founder and currently its chief medical officer.
“Anxiety and substance use disorders represent some of the most prevalent neuropsychiatric indications with high unmet need, representing over 25% of mental illnesses in U.S. adults and impacting over 60 million individuals,” Donabedian said in a statement.
With a founding team that has “extensive” experience creating companies and developing drugs for the central nervous system, Newleos will “use this capital to conduct proof-of-concept clinical trials across our programs,” he added.
In addition to Longwood, the Series A fundraising round announced Thursday saw participation from Novo Holdings, DCVC Bio and Arkin Bio Capital. An arm of Goldman Sachs led the round.
Neuroscience, considered by many to be one of the tougher areas of drug research, has recently received more venture capital backing. Prominent firms last year pumped more than $1.5 billion into startups focused on the nervous system — a marked increase from the annual sums seen in 2022 and 2023, which were each less than $1 billion.
Last month, Atalanta Therapeutics raised $97 million from an investor syndicate with well-known names like F-Prime Capital and the venture arms of Novartis and Sanofi. The biotech aims to treat a type of epilepsy and Huntington’s disease with a drugmaking technology called RNA interference. Like Newleos, Atalanta’s fundraising round received more interest than was initially expected.
Longwood has also bet on Engrail Therapeutics, a precision neuroscience company that closed a $157 million Series B round last March. Engrail’s programs target generalized anxiety disorder, depression and PTSD.
Longwood has “long recognized that currently available treatments fall short of meeting the needs of patients with mental health conditions,” Christoph Westphal, the firm’s founding partner and the executive chairman of Newleos’ board, said in the Thursday statement.
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