SDEE Entrepreneur Round Table with Xontogeny

On May 12, 2020, SDEE’s virtual event was a discussion with Chris Garabedain, the chairman and CEO of Xontogeny.

Xontogeny is a Boston-based life sciences accelerator that funds, supports, and advances life science technologies from early development to proof-of-concept clinical studies.

Chris had a successful career at companies such as Abbott, Gilead, and Serepta. After leaving the CEO position at Serepta, many entrepreneurs reached out to him for advice on funding opportunities. He realized that there was a need for a new model of funding for small, early stage companies. With the help of his network and, in particular, of Perceptive Advisors, with whom he worked closely during his time at Serepta, he founded Xontogeny in 2016.

The business model

The Xontogeny business model is to fund early-stage life sciences companies and to be intimately involved in their research and development plan. Xontogeny is made of people with extensive expertise who can do more than participate in quarterly board meetings. They take a size of the common equity and work to figure out how to make the company a valuable enterprise for series A investment.

They invest typically 10 to 20 million dollars in various life sciences fields, such as small molecule or peptide therapeutics, diagnostics, devices, telemedicine, machine learning, and artificial intelligence. Telemedicine grew exponentially during the shut-down due to COVID-19 and remote sensors may augment the collection of data for clinical studies.

The investment strategy

Xontogeny prefers get involved from the inception, but they have the flexibility to also fund companies that have already raised money. However, their focus is mainly on early-stage companies to step up their value before series A. They may work with academic researchers who want to develop the technology they invented, or with technology transfer professionals who want to commercialize an asset while the scientist continues to run his or her academic lab, or with entrepreneurs who have the idea for a product.

Xontogeny is not interested in the large investments necessary for early drug discovery that has not yet generated a lead compound. Rather, they consider mainly companies that have an intellectual property covered lead asset, even if not fully optimized. In the case of a therapeutic, the lead compound must have demonstrated activity in well accepted and validated in vitro or in vivo models so that it is likely to succeed.

What Xontogeny brings to the table

Xontogeny can help form the company, license a technology from a university, negotiate a better licensing deal, or secure more IP. Importantly, they also help with designing the in vitro and in vivo scientific experiments to strengthen the data and de-risk the technology. As their goal is to bring a program to a proof-of-concept clinical study, they also interact with the FDA and help the design of proof-of-concept clinical studies. In addition, they mentor the scientist founder to become the CEO of a successful public company.

The example of Landos Biopharma

Landos started when Chris met a researcher from Virginia Tech who had shown that a gut restricted compound had a potent anti-inflammatory activity in rodent models of inflammatory bowel disease. Backed up by Xontogeny's 10 million dollars and working with CROs, Landos did additional animal experiments in pigs and toxicology experiments to support the long-term human maintenance clinical trials. The additional animal studies allowed Landos to file 2 new drug applications with the FDA and the initial 10 million dollar investment led to a 60 million series B funding round. Phase I placebo-controlled single and multiple ascending dose clinical trials in healthy individuals started last year in Australia. Australia was chosen, with the endorsement of the FDA, because of government financial incentives. The trials are currently on hold because of COVID-19, however they will restart soon.

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