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Former Xontogeny CEO Emerges to Helm Newly-Launched $25 Million Biotech Startup Accelerator



5/18/2017 5:43:32 AM

Former Sarepta CEO Emerges to Helm Newly-Launched $25 Million Biotech Startup Accelerator May 18, 2017
By Mark Terry, BioSpace.com Breaking News Staff

Boston-based Xontogeny, calling itself a life sciences accelerator, announced it had closed on a $15 million tranche of a $25 million Series A financing.


The sole investor is Perceptive Advisors.

There are a couple notable things about Xontogeny. First, is its founder, chairman and chief executive officer, Chris Garabedian. Garabedian is best known for being the former president and chief executive officer of Sarepta Therapeutics (SRPT). Sarepta is now known for the contentious approval of Exondys-51, a drug to treat Duchenne muscular dystrophy (DMD). Garabedian resigned from the company in 2015, two years before the drug’s approval, but was noted for battling the U.S. Food and Drug Administration (FDA) over the drug (something that didn’t end with his resignation), and the volatility of the company stock during his tenure.

Prior to his role with Sarepta (SRPT), Garabedian had positions at Gilead (GILD) and Celgene (CELG).

The second distinction is Xontogeny’s business model. Likely to be a virtual company, Xontogeny’s accelerator focus is more on what John Carroll, writing for Endpoints News, describes as “godfathering new drug development for a group of would-be entrepreneurs who either can’t or really don’t want to go the traditional VC route to fund a biotech startup.”

Garabedian told Carroll, “I was getting a number of calls from entrepreneurs who had an idea, had their hands on something of value, increasingly looking for someone to partner with but without a lot of deep industry experience. The problem was that venture capitalists either weren’t particularly interested or wanted too big a piece of the companies. But Garabedian thought they were “unique and good opportunities that would never see a pathway forward unless they found someone to help them find a way forward.”
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So, for six to ten startups, Xontogeny plans to play the role of godfather and mentor. Xontogeny states, “Mr. Garabedian will partner with Xontogeny’s portfolio companies by serving as an active mentor and advisor to the CEOs in the role as Executive Chair or as an active member of the Board of Directors. In addition, founding scientists and entrepreneurs will work alongside Xontogeny’s experienced leadership team and its network of advisors and service providers. Xontogeny will further support the management of these companies by providing expertise and strategic direction across the spectrum of preclinical and clinical development and program management, while enabling a lean and efficient infrastructure until a program is further de-risked.”

What appears to differentiate Xontogeny from most other accelerators is that it’s not offering any kind of incubator space or even, necessarily, funding. Don Seiffert, writing for the Boston Business Journal, notes that Xontogeny will focus on helping startups advance from preclinical work through a successful Phase II clinical trial. “Xontogeny will hire up to a dozen seasoned drug development experts to mentor and advise the companies, and in return, Xontogeny will receive a cut of equity equal to a company founder. Xontogeny won’t directly fund the companies, but he said the affiliation with his team will prepare those companies to get outside funding,” he wrote in the Boston Business Journal.

Which sounds like a cross between an accelerator and a consultant.

“If you take your typical new entrepreneur,” Garabedian told The Boston Business Journal, “you could have someone who’s earlier in their career, maybe they are from academia, maybe they don’t have a long history in industry. If they went to traditional life science investors, they might not be considered to be worthy of investment.”

One of the things Garabedian points out is that, from a stock point of view, Phase II can be a huge catalyst. “If you look at history of industry, nothing has beaten the return on investment and value inflection that occurs with a clinical proof of concept, usually in the form of a Phase II study,” he told the Boston Business Journal. “Even if I look at Sarepta as an example, the Phase II study drove value to a stock price of $45 and ultimately $55 a share. Even getting a commercial product on the market has not achieved today that same level of stock price.”

True enough. Sarepta shres are currently trading for $34.43.


Read at BioSpace.com


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