Promising Biotech Startup
Merck (NYSE: MRK) to Invest $600 Million
Some two years back, biotech giant Merck (NYSE: MRK) found a small startup’s work highly interesting. It paid the company—Lycera, a biotech from the University of Michigan—$12 million right away, with a further $295 million due, contingent on developmental milestones.
Tuesday, Lycera disclosed that Merck has in fact raised that package to $600 million, Fierce Biotech reports
Lycera works to attack autoimmune diseases, focusing on small molecules that target T-helper 17 (Th17) cells. The startup believes that this represents a novel approach toward combating several common autoimmune problems—rheumatoid arthritis, psoriasis, multiple sclerosis, and even inflammatory bowel disease.
Neither Merck nor Lycera have disclosed the details of this revamped funding package. However, according to Fierce Biotech, discovery deals typically comprise a smaller down payment with a much larger payment held in waiting, pending development and progress.
At the very least, the upgraded investment signals Merck’s intense interest in the biotech startup's work, as well as the perceived importance thereof.
Lycera received $36 million in a Series A financing round in 2009, and the company hopes to bring its candidate to clinic within the next year or year and a half.
The foundation of the company is CSO Gary Glick’s work at the University of Michigan, which led to the hypothesis that inhibiting retinoic acid related orphan receptor (RORyt) can lead to controlling IL-17.