In a coup for a Palm Beach County biotech hub that has struggled to sprout for-profit spinoffs, a company created at Scripps Florida raised $55.3 million from a group of high-profile venture capitalists.
The startup, Expansion Therapeutics Inc., said Wednesday that it brought in money from big-name backers, including 5AM Ventures, Kleiner Perkins Caufield & Byers, Novartis Venture Fund, Sanofi Ventures and Alexandria Venture Investments.
The company, based on research by Scripps Florida scientist Matthew Disney, will look for cures to a group of 30 genetic diseases known as “expansion repeat disorders” that go untreated and are triggered by faulty RNA. One example is myotonic dystrophy, an untreatable disease that affects about 40,000 Americans and is the leading cause of adult-onset muscular dystrophy.
Expansion Therapeutics’ operations will be divided between Jupiter, where its labs will be located, and San Diego, home of its headquarters. The company is expected to have eight employees in Jupiter, where Expansion Therapeutics has taken lab space at Florida Atlantic University’s biotech incubator.
Expansion Therapeutics Chief Executive Kevin Forrest will work from the company’s headquarters in San Diego, but he says this spinoff could spark a long-awaited trend of biotech startups in Jupiter.
“Hopefully this will open up the investment community’s eyes to the quality of the science coming out of Florida,” Forrest said.
The deal is an unusually large one for Florida’s nascent biotech industry. While $55 million financing rounds are common in the biotech hubs of California and Massachusetts, they rarely happen elsewhere.
Florida’s entire biotech industry raised just $34 million in venture capital in the third quarter of 2017, according to the PwC | CB Insights Healthcare MoneyTree Report. California companies raised $1.6 billion.
In an interview on Wednesday, Forrest and Disney declined to predict how soon patients with myotonic dystrophy might be able to use its drugs. Drug development is a notoriously slow process, and more biotech startups fail than succeed.
“We’re still a discovery-stage biotech company, and to get a safe drug that works into humans isn’t easy,” Forrest said.
When Gov. Jeb Bush lured the nonprofit Scripps Research Institute to Florida in 2003 with a $310 million subsidy, private-sector spinoffs were a major part of the pitch. Bush touted an economic forecast that predicted Scripps Florida would create 50,000 private-sector jobs in 15 years. The actual activity has fallen far short of that mark.
Scripps Florida’s spinoffs have been only occasional, and they have yet to generate large numbers of jobs. For instance, in 2009 Envoy Therapeutics launched in Jupiter with $5 million in venture capital.
The startup wanted to be near Scripps Florida’s labs. In 2012, a Japanese company paid $140 million for Envoy Therapeutics, and in 2013 the new owner moved the company’s 13 scientists from Jupiter to San Diego.