Axonis Therapeutics, a young biotechnology company, has raised $115 million to support its efforts to make first-of-their-kind medicines for neurological disorders.
The investment firms Cormorant Asset Management and venBio Partners co-led the Series A financing round announced Wednesday. According to Axonis, the round also had “significant” contributions from a handful of other backers, including Sofinnova Investments and Perceptive Advisors, and attracted more interest than initially expected.
The fresh funds will be used to push Axonis’ most advanced drug through key experiments designed to validate the underlying idea behind it and show it works as intended in people. The drug, which should enter human testing this year, is meant to treat epilepsy and pain by amplifying KCC2, a protein vital for brain function.
In addition to that program, Axonis plans to put money toward “next generation” compounds directed at KCC2 for epilepsy, pain, as well as other psychiatric and neurodevelopmental disorders.
In the nervous system, cells communicate via the rush of electrically charged particles. The cascade is essential for the body to function. It tells muscles how to move and the brain what it’s sensing — from the sound of a morning alarm to the smell of coffee.
But it’s a complex and delicate balance. If this stream of particles, or ions, happens too often or not enough, it can cause disease. Researchers have found overactive brain cells in people with Alzheimer’s and those with depression who don’t respond to popular medications. Overly excited cells are also a hallmark of epileptic conditions.
Axonis and its principle backers think the company has identified a very promising target in KCC2, which regulates two signaling molecules that calm nerve cells.
“We like the target and the preclinical data and the market opportunities,” said Raymond Kelleher, a managing director at Cormorant.
Kelleher explained that, when Cormorant chose to invest in Axonis, the firm was struck by the logic of Axonis’ strategy. KCC2 is “in the right place” to regulate nerve cell excitement “in a way that can suppress seizures,” he said. There’s also genetic evidence supporting it’s use as a target, since rare mutations in the protein are tied to certain childhood epilepsies.
More broadly, Kelleher believes investors are waking up to the progress biotechs have made developing more precise drugs for the central nervous system. Karuna Therapeutics and Cerevel Therapeutics, for example, were recently acquired for $14 billion and almost $9 billion. Their work on a new class of schizophrenia medication has brought attention back to the largely overlooked field of neuropsychiatry.
A wave of startups have drummed up excitement as well. One, named Rapport Therapeutics, raised $136 million in June by going public. Like Axonis, the company is trying to create targeted neurological treatments, with its most advanced program in early human testing as a potential therapy for drug-resistant seizure disorders.
Rapport was backed early on by Johnson & Johnson, Third Rock Ventures and Arch Venture Partners, and later by Cormorant.
“We like the direction that the CNS field is moving in,” Kelleher said. “Investors and strategics are definitely taking interest.”
Axonis was co-founded in 2019 by Joanna Stanicka, a former research fellow at Harvard Medical School, and Corey Goodman, who also co-founded venBio and currently serves as one of the firm’s managing partners. Ahead of the Series A round, Axonis had raised more than $34 million in dilutive seed funding.
Alongside its new haul, the company has added Kelleher and Jonathan Leff, an executive partner at Sofinnova, to its board of directors.
