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Pheon rides wave of ADC interest with $120M financing

British biotechnology startup Pheon Therapeutics has raised another $120 million in venture funding, riding a wave of investor interest in the type of cancer medicines, known as antibody-drug conjugates, it specializes in.

The Series B funding, announced Tuesday and led by TCGX Capital, will help Pheon bring multiple drugs into clinical testing against solid tumors. Its first trial will begin later this year.

ADCs link a cell-killing toxin to a targeting antibody, an approach to cancer drugmaking that’s meant to target tumors more precisely than chemotherapy. Though research into ADCs has been underway for decades, investment has recently surged to due to technical advances, clinical progress and an upswing in approvals.

Between January 2022 and mid-March, ADC companies raised a combined $2.7 billion in 57 private and public financing deals, according to a recent report from analysts at the investment bank Piper Sandler. Over that time, 14 were acquired or merged into another company, a number that’s since increased with the April buyout of ProfoundBio.

Piper analysts estimated there are now more than 160 companies in the field, from pharmaceutical giants like Pfizer and AbbVie to small startups working on newer approaches.

“This is already in the here and now, and firmly established as an incredibly important modality in the treatment of patients with solid tumors,” said Cyrus Mozayeni, Pheon’s CEO, in an interview.

Pheon claims it’s taking a different approach to ADC drug development than others, but is sharing few details. The company hasn’t disclosed which targets it’s going after, although Mozayeni said they “haven’t been explored clinically” and aren’t popular ones like HER-2 or Nectin-4. Pheon is also working on new chemical linkers and toxic payloads, he said.

“That is a bit different from what we have been seeing in the field of ADCs, which is largely a consolidation around a narrow set of targets with marginal improvements in linkers and payload technologies,” he said.

The company’s first three drug prospects are all aimed at the same, new target — one that’s “broadly and deeply expressed” over a wide range of solid tumors, but only sparingly on healthy cells, according to Mozayeni. Pheon isn’t disclosing what it is given the “highly competitive nature of the field,” he said. The most advanced of the three uses a similar toxin-payload combination as some other ADC developers, while the other two have different components.

BVF Partners, Perceptive Advisors, Atlas Venture and Forbion backed Pheon alongside TCGX and a few others. The startup previously raised $68 million in a Series A round when it emerged from stealth in 2022.

Mozayeni said the company hasn’t ruled out an initial public offering in the future, depending on the state of the public markets.

“We’re getting very close to that, so we can start thinking about it,” he said. “But as we all know, by far the most important thing is the macro market environment.”

Mozayeni, most recently an entrepreneur-in-residence at Atlas Venture, was previously the CEO of gene therapy company Vedere Bio. He said the new funding round will carry Pheon through the end of 2027.