Former Sarepta Chief Garabedian’s Accelerator on the Move
About two years ago, former president and chief executive officer of Sarepta Therapeutics, Chris Garabedian, formed Xontogeny, a biotech accelerator. He left Sarepta in 2015, about a year before its long, dramatic and controversial approval of Exondys 51 for Duchenne muscular dystrophy (DMD). Garabedian was recently at the University of Texas Health Science Center in San Antonio talking up Xontogeny.
Xontogeny was founded in 2016, but on May 18, 2017, closed on a $15 million tranche of a $25 million Series A financing. Xontogeny was founded to support life science technology startups.
In September 2017, Xontogeny backed Blacksburg, Virginia-based Landos Biopharma, which is working to develop drugs for inflammatory bowel disease. It was the first company to join the accelerator and received a $10 million Series A round from Perceptive Advisers. Perceptive was Xontogeny’s only investors in its own Series A last year. It is basically Garabedian’s partner in the accelerator.
But now, with its first company joining them and cash in hand, the accelerator is, well, accelerating, and is actively looking for companies to recruit. Which is partly why Garabedian was at the University of Texas Health Science Center.
“What he’s doing is definitely in alignment with what we’re doing and what a lot of universities are doing,” John Gebhard, the Health Science Center’s assistant vice president for the office of technology commercialization, told Xconomy.
But university work tends to be very early in the discovery stage, which is typically earlier than most accelerators are interested in. Accelerators tend to fund early development work that will get the company’s product into the clinic.
Garabedian noted that his accelerator, according to Xconomy, is “targeting drugs that previously have made clinical progress because of only early funding, such as from grants, and often where a lead candidate has already been identified.” He also expects Xontogeny to eventually support as many as 10 companies.
Garabedian is also interested in hiring people to work directly for Xontogeny, such as in regulatory affairs instead of each business bringing in well-known C-suite executives. He would prefer they spend their limited funds on clinical trial design and drug formulation instead of executives.
“I believe the majority of failure can be explained by the choices that are made in design, and not paying enough attention to that in the early stages,” he said in his talk. “Value creation lies in the key decision points around design that drive development and regulatory strategy.”
The bottom line: he’s looking for companies that might file an investigational new drug application within two years. Other factors Xontogeny is evaluating is the strength of the company’s drug candidates, and the competitors in the market, as well as the history of successes and failures of similar drugs.
“We’re picking technologies right, and we’re obsessing over that design in early development,” Garabedian said during the talk. “Our goal is to increase the success rates that the industry has seen. We’re not aiming to bat 10 percent or 20 percent—we want to be 50-plus percent.”
Probably most accelerators would like that as well, but reality may intervene. Most drugs don’t make it to market and many die in late-stage trials. But Garabedian and Xontogeny plan to be picky and focus on supporting their philosophy in hopes of bringing good biotech companies to full bloom.