Dicerna Pharmaceuticals this week announced that it has raised $60 million through an over-subscribed Series C round of financing, giving the company the financial resources to move its two lead drug candidates into clinical development.
The financing comes at a time when RNAi therapeutics have regained investor interest amid technological and clinical advances, and stands out as the biggest investment for a privately held company developing drugs based on the gene-silencing technology, topping the nearly $50 million pulled in by now-defunct Nucleonics nearly a decade ago.
It also raises the possibility that Dicerna may look to go public, which would give the company a new and readily available source of financing as it looks to expand beyond its core oncology focus into genetically defined diseases of the liver.
The round was led by new investor RA Capital, which notably led a $36 million private offering of common stock by publicly traded Arrowhead Research earlier this year (GSN 5/2/2013).
New investors in Dicerna’s financing round included Brookside Capital, Deerfield, and Omega Funds, as well as all five of the company’s existing investors — Abingworth Management, Domain Associates, Oxford Bioscience Partners, Skyline Ventures, and SR One.
Proceeds from the Series C round give Dicerna enough cash to fund its operations at least through 2016, CEO Douglas Fambrough told Gene Silencing News, and will primarily be used to advance the firm’s first two drug candidates into clinical testing next year.
The first, dubbed DCR-M1711, comprises the company’s Dicer-substrate RNAi molecules formulated in its EnCore lipid nanoparticles. It is designed to silence Myc, a regulator gene mutated in a variety of cancers, as a way to treat hepatocellular carcinoma.
The second, which has been advanced over a prostate cancer program that had previously been on deck, is being developed to treat an undisclosed rare disease of the liver and marks Dicerna’s expansion into indications beyond cancer.
Though both drugs are expected to be in clinical trials by 2014, Fambrough stressed that the real milestone for the programs will be the establishment of human proof of concept, which is expected for 2015 and could open the door for a Dicerna initial public offering.
Going public, he said, is now a “potentially near term” option for Dicerna. While drug developers in phase III tend to have an easier time doing so, less advanced companies pursuing indications with “a clear genetic link” between patient and therapy have had success floating their shares.
Companies working in areas where there is “the potential to show a clear and compelling clinical response very early in the clinical trial process and potentially move very rapidly through the clinic … are attractive at an earlier stage,” Fambrough added, citing newly public firms Agios Pharma, which has no drugs in human trials, and Epizyme, which is in phase I with two agents.
By demonstrating that its RNAi technology can hit its intended target and trigger a therapeutic effect, Dicerna would be in a good position to follow these companies’ footsteps and access the capital needed to expand its pipeline.