Seattle biotech startup born out of a Roche buyout lands $93M to advance therapies

Seattle biotech startup Bonum Therapeutics raised $93 million less than two months after its parent company Good Therapeutics was bought for $250 million by Roche, with the potential for milestone payments.

Bonum founder and CEO John Mulligan hopes to repeat the success of Good Therapeutics by using the same platform technology and potentially leveraging a similar future buyout structure.

Big pharma companies typically buy an entire biotech startup, including the core technology along with any drug candidates.

But when Roche bought Good Therapeutics, the pharma giant acquired only the startup’s lead oncology candidate and the rights to develop closely related agents. The platform technology and the 26-member team shifted to Bonum, a Good Therapeutics spinout.

“Pharma companies have not historically done well bringing platform technologies in-house. It’s just been kind of where platform technologies go to die,” said Mulligan, who founded Good Therapeutics in 2016 and was its CEO.

Mulligan is not the only one convinced that he landed on an effective mechanism to keep control of his company’s tech while mining it for more potential drugs. 

The same syndicate of investors behind Good Therapeutics also is backing Bonum in the new Series A round announced Tuesday. Backers include Rivervest Venture Partners, Roche Venture Fund, Digitalis Ventures, 3×5 Partners, Codon Capital and new investor Vivo Capital. Vivo’s Mitchell Mutz will also join Bonum’s board of directors.

The syndicate pulled in a high return with its investment in Good Therapeutics. Mulligan brought to the startup to its acquisition with only $32.6 million in total investment, selling its lead candidate after preclinical testing.

Several other recent biotech buyouts also have followed non-traditional structures. Teneobio spun out three of its assets into affiliate companies as part of the acquisition of the rest of the company by Amgen last year.

Only where necessary

Using the platform developed at Good Therapeutics, Bonum creates protein-based therapeutics that are active in the body only where they need to be. The agents reversibly switch from an inactive to active form when they bind to their target. 

Good Therapeutics sold Roche an agent that delivers an immune modulator called Interleukin-2 to T cells that express the molecule PD-1. Interleukin-2 shifts to an active state when the agent binds PD-1 and bolster’s the T cells’ ability to attack tumors.

Bonum Therapeutics uses the same platform technology that enables a protein to switch to an active state upon target binding. Bonum, which means “good” in Latin, is focused on developing conditionally active versions of other immune modulators.

The idea is to lessen the toxic side effects that can occur when such modulators are given throughout the body and maximize their anti-tumor effects.

Ultimately, less toxic forms of such agents might enable oncologists to better prescribe cocktails of drugs without making the patient sick from the treatment, said Mulligan.

Bonum will investigate the immune-modulating cytokines Interleukin-12, Interferon-alpha and TGF-beta (the team envisions Interleukin-12 regulated by PD-1 binding, and Interferon-alpha regulated by PD-L1 binding).

The Bonum team is also investigating the potential of cytokines that become active in the presence of ATP, a cellular source of energy produced in high amounts by tumors. And they are seeking partners to help them explore conditions other than cancer.

Mulligan, a biotech veteran with a Stanford Ph.D., believes in scientist founders. He said they understand how to evaluate data and drop projects that are failing.

“The hard part about biotech is the same thing as being a good scientist. It’s following the data,” said Mulligan.

At its inception, Good Therapeutics tested a lot of agents in multiple programs before honing in on the candidate with the most promise in animal studies. Bonum is taking a similar approach to keeping its scientific options open at the start. Ultimately, Mulligan and his team will follow the data.