Deal of the Year: Galecto Biotech

Completed in October 2018, the round was co-led by venture capital firm Ysios Capital and investment firm OrbiMed, with contributions from drug producers Bristol Myers-Squibb, Novo and Merck Group.
Novo and Merck invested through their respective corporate venturing subsidiaries – Novo Seeds and M Ventures – and were joined by HBM Healthcare Investments, Maverick Ventures, Seventure Partners, Sunstone Capital and OrbiMed Israel.
Based in Copenhagen, Denmark, Galecto Biotech extends more than a decade’s academic work by Ulf Nilsson and Hakon Leffler, both professors at Lund University, alongside Tariq Sethi, a former professor at University of Edinburgh who has since left for King’s College London.
The spinout was established in 2011 to deliver modulators for a class of proteins known as galectins, which are believed to influence the progression of severe disorders such as fibrosis, inflammation and cancer in organs including the lungs.
Galecto’s recently completed phase 1/2a studies of lead asset TD139 – indicated for idiopathic pulmonary fibrosis, which progressively impairs lung function – demonstrated favourable tolerability and efficacy in reaching its intended target, a type of macrophage in the pulmonary alveolus known colloquially as a dust cell.
With the series C funding, Galecto intends to make further progress on its therapeutic pipeline, which includes candidates for ocular fibrosis, fatty liver disease, inflammation-inducing disorders and cancer.
That money will support several clinical studies, including a phase 2/3 trial of TD139 in Europe and North America and probes into two galectin modulator candidates for diseases affecting other organs. At the time of the series C round, Chau Khuong, partner at OrbiMed, argued TD139 had “great promise” and commended the strength of Galecto’s underlying science.
Galecto Biotech recently enhanced its management team with chief medical officer Richard Marshall, who spent 15 years in drug discovery, clinical development and business development roles at drug maker GlaxoSmithKline (GSK).
Marshall’s last position at GSK – as vice-president and head of the fibrosis and lung injury discovery performance unit, aligns well with Galecto’s research. Also heartening is Bristol Myers-Squibb’s interest in the series C round, which builds on a strategic partnership the pair set up in 2014.
Galecto previously raised an undisclosed seed sum in 2012 from Novo Seeds and M Ventures – respective corporate venturing vehicles of drug firms Novo and Merck Group – as well as Seed Capital and Sunstone Capital, with all four investors returning for a $4m round the following year. The spinout’s other shareholders include commercialisation firm Forskarpatent i Syd, which helped get the business started.
Other nominees
Aprea Therapeutics, $62.8m series C (Karolinska Institute)
Beam Therapeutics, $135m series B (Harvard University)
Passage Bio, $115.5m series A (University of Pennsylvania)
Ultrahaptics, $44.8m series C (University of Bristol)