Not all late-stage companies are feeling the funding drought.
Biotech startup Emalex Biosciences announced on Thursday its $250 million Series D raise, led by Bain Capital. Also participating were Paragon Biosciences, Valor Equity Partners and Fidelity Management and Research Co.
Chicago-based Emalex raised $35 million in Series C funding last year, per Crunchbase data.
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The company was started in 2018 by Paragon Biosciences, a life science incubator, to create treatments that tackle the central nervous system. Since then, Emalex has zeroed in on Tourette syndrome (which causes repetitive muscle movements and sounds) and Willis-Ekbom disease (a sensory disorder also known as restless leg syndrome).
Funding will go toward Emalex’s Phase 3 clinical trial for a drug that may be able to treat Tourette syndrome and, with an expected 220 patients across 90 different locations, it’s likely one of the biggest clinical trials for a drug in this space. This is the last stretch before the drug can be commercialized and marketed to the public.
Research trumps market
There has been a general pullback in the market after 2021 saw a flood of funding, and late-stage companies have taken a hit.
Biotech wasn’t immune. So far in 2022, early-stage startups saw $23 million in funding, compared to less than $10 million for those in the later-stages. That’s an 80% difference. (Comparatively, per Crunchbase data, there was a 44% difference between early- and late-stage startup funding last year.)
And yet, strong research trumps market fluctuations every single time. Biotech investors are already wading through a risky business that sees a 90% failure rate, and robust clinical data shows strong proof of concept.
We touched on this when Rivus Pharmaceuticals raised $132 million in September for a cardio-metabolic drug — the company had announced positive findings for its obesity-related therapeutic before getting funding. Emalex published promising findings from their Phase 2 clinical trials last year that showed its drug candidate reduced motor and audible tics better than the placebo.
Illustration: Dom Guzman
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Author: Keerthi Vedantam