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A Versant-backed biotech emerges to take on ‘overlooked’ cancer targets

Scientists knew the gene all too well. Decades of research had shown that mutated versions of it were behind a variety of cancers. But designing a medicine that could block the effects of this gene, called KRAS, proved exceptionally challenging, which earned it a reputation for being “undruggable.”

Then, in 2013, a breakthrough came from the laboratory of Kevan Shokat, a chemical biologist at the University of California, San Francisco. Shokat’s lab found a hidden groove on the proteins created by a certain, prevalent KRAS mutation, and developed compounds that used this groove to latch onto the proteins and keep them inactive. This work ultimately opened the door for Amgen’s Lumakras, which last year became the first approved KRAS-targeting therapy.

For Nested Therapeutics, a biotechnology company that launched publicly Thursday, the KRAS story is somewhat of a blueprint. Perhaps that’s to be expected, as Shokat is one of the company’s scientific co-founders.

Yet, unlike earlier efforts, Nested says it hopes to eventually go after more “overlooked” clusters of mutations. With a slate of newer technologies at its disposal, the company is trying to better understand how these mutations drive cancer, as well as identify structural pockets in the resulting proteins that small molecule drugs can target.

“Our hypothesis is there are driver mutations still hiding in plain sight,” said Klaus Hoeflich, a Nested co-founder and the company’s chief scientific officer. Hoeflich previously served as senior vice president of biology at Blueprint Medicines, before the investment firm Versant Ventures recruited him to build what would become Nested.

“We tend to ignore the 95% of tumor genetics that aren’t blindingly obvious driver mutations,” said Carlo Rizzuto, a managing director at Versant. “And we thought that there was a lot of signal in that noise. You just have to figure out how to decode it.”

So far, Nested has raised $125 million to support its precision cancer research, including $90 million from a Series A financing round led by the Life Sciences Investing business within Goldman Sachs Asset Management.

In addition to funding, Nested has attracted a group of scientific leaders and advisers. The group includes Yongxin Han, a drug discovery expert who spent nearly 30 years at Merck & Co., and Arvin Dar, a professor of oncological and pharmacological sciences at Mount Sinai’s Icahn School of Medicine who is also a Nested scientific co-founder.

According to Nested, the team it assembled has collectively helped usher 35 molecules into human testing and 10 precision cancer medicines onto the market.

“Investors [have] very much focused on the combined experience of the team that we were able to pull together,” said Darrin Miles, the former chief commercial officer of Agios Pharmaceuticals, who now serves as Nested’s CEO. “This is a highly experienced precision oncology drug hunting team.”

Nested’s leadership hopes this team can help the company stand out in what’s become one the hottest — and most rapidly crowding — areas of drug research and startup formation. Just last year, the precision oncology biotech Flare Therapeutics launched with $82 million in funding. And not long after Flare’s arrival, another player, Scorpion Therapeutics, announced that it had appointed as its CEO Axel Hoos, who had led cancer research at GSK for the better part of the past decade.

More recently, Moma Therapeutics, a company developing precision treatments that target “molecular machines,” secured an additional $150 million in funding.

The fresh funds Nested raised will go toward advancing the company’s drug programs, of which there are currently five. The most advanced of them is a “molecular glue” that targets multiple parts of a well-studied cell signaling pathway known as MAPK, which research suggests plays a role in cancer development when impaired. Nested expects to ask regulators in the first quarter of next year for permission to begin clinical trials.

Miles said that the company anticipates having a second drug enter human testing by 2025 — which is also how long the company estimates its current cash runway will extend.

Notably, Nested’s launch comes just several months after a historic downturn in the biotech stock market reached its nadir. According to Versant’s Rizzuto, the timing of Nested’s latest fundraising was, at least in part, due to how far its programs had progressed.

“In this market, you really need to have taken your molecules a fair way towards the clinic before most investors will get interested,” he said. “With Nested, the reason why we’re raising now, a few months ahead of achieving a development candidate, is precisely because of that.”

“If this was 2020,” he added, “we probably could have raised this financing a few months after starting the company.”

For now, Nested says it’s focused on mutations for which there is already evidence that drugging them could provide some level of therapeutic effect.

“These are targets that folks may be familiar with, may understand, but have yet to be successfully drugged to some extent,” Miles said. “In some cases, [they’ll] be well understood, perhaps may have something on the market that targets them, but we think we’ve got a better way of being able to hit them.”

Eventually, though, the company aims to identify new targets.

“Many biotechs are looking at the exact same targets, going after them with the same mechanisms,” Hoeflich added. “We want to have a uniqueness to the opportunities that we look at, so we’re not piling up all in the same place.”