The precision neuroscience company, co-founded by former Cipla executive Vikram Sudarsan, will now invest the capital to support its product pipeline for neuropsychiatric and neurodevelopmental disorders. This marks one of the largest early-stage funding rounds of a clinical-stage pharmaceutical company.
The round was co-led by new investors F-Prime Capital, Forbion, and Norwest Venture Partners. Other investors include Eight Roads Ventures, RiverVest Venture Partners, Red Tree Venture Capital, funds managed by abrdn Inc., Ysios Capital, Longwood Fund, and existing founding investor Pivotal Life Sciences, the company said.
The company did not disclose the stake diluted by co-founders and existing investors. But there was significant investor interest, evident from the fact that the company stepped out to raise $100 million in its Series B round of funding and ended up with a lot more than that, as per Sudarsan, who is also the CEO of Engrail Therapeutics.
With this, the company has raised over $220 million so far since it was founded in 2019 by Sudarsan and Stephen Cunningham.
Engrail is developing therapies for the treatment of disorders including anxiety disorders, depression, post-traumatic stress disorder, and rare neurodegenerative diseases. It currently has a pipeline of four key products under development, Sudarsan said.
Its primary product is a highly selective drug for generalized anxiety disorder that targets specific channels in the neural network without having side effects that benzodiapines have, like addiction potential, cognitive impairment and sedation.
The drug is currently under phase-2 clinical trials and is still a long time away from commercial launch.
“The drug is quite a few years from the market. We expect the results of the phase-2 trials next year and then the phase-3 trials could take a few years,” Sudarsan said.
Other drugs under development at Engrail include an anti-depressant, an anti-depressant with an additional anti-anxiety profile and a treatment for Menkes disease that affects infants. The drugs are between pre-clinical stage to phase-2 clinical trials.
The Series B round of funding is expected to help the company advance with the further stages of development for these drugs.
“We will use the funding to support clinical development of our entire pipeline. The capital raised gives us the ability to carry out two phase-2 studies and two phase-1 studies,” Sudarsan said in an interview. “The funding gives us runway up to mid-2026,” he added.
As per Sudarsan, the market for anxiety, depression and other neuro diseases is huge and there is growing demand for chronic, efficacious and safer drugs that do a better job in targeting the right patients and disease severity. Talking about the total addressable market for the company in the US itself, Sudarsan said there are around 5.5 million patients currently on medication for generalized anxiety disorders in the country with an additional 1.4 million showing signs of both anxiety and depression and an additional 9 million patients with unspecified anxiety. And the number is growing each year.
“We look forward to completing our ongoing ENX-102 phase 2 study in generalized anxiety disorder and advancing the rest of our pipeline into clinical development,” Sudarsan said. The company, like most drug discovery companies, is currently in a pre-revenue stage.
Sudarsan is the former CEO of Cipla Technologies where he built a pipeline of branded products to treat CNS disorders and respiratory diseases. Before that, he was head of strategy at Cipla New Ventures.
Talking about how such pharma companies can create value for investors, Sudarsan said, “The options for value creation are many, including strategic pharma partnerships, M&A and going public.”
Sudarsan formerly co-invested in a $26 million round for an Alzheimer’s company—Chase Pharmaceuticals based in Washington DC—while at Cipla and exited the company after a $1 billion sale to Allergan three years after his investment.
Engrail is primarily based in the US, with team members in India and Europe as well.
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Published: 19 Mar 2024, 07:27 PM IST