C4 Therapeutics Makes Auspicious Debut With Roche Tie-Up, $73m Series A

On the strength of research licensed from Dana-Farber Cancer Institute, C4 will develop targeted protein degradation therapeutics against disease-causing proteins in a range of therapeutic areas that could include cancer and the central nervous system.

One of the decade's largest Series A financings for a biopharmaceutical start-up and a potentially lucrative collaboration with Roche mark the unveiling of C4 Therapeutics, which will work primarily with partners to develop what it calls Degronomids against targeted disease-causing proteins.

Based in Cambridge, Mass., and working with research licensed exclusively from Dana-Farber Cancer Institute[See Deal], C4 will perform initial preclinical development of Degronomids, novel chemical adapters that are conjugated with selective small-molecule therapeutics to naturally degrade targeted proteins via a cell's ubiquitin/proteasome system. Upon completion of predefined preclinical work, Roche will hold the option to pursue further development and commercialization of the candidates. [See Deal]

No specific financial terms were disclosed for the deal, announced Jan. 7, but C4 said it will receive an unspecified upfront payment and could earn development, regulatory, commercial and sales milestones and potential tiered sales royalties under the agreement. All told, the deal value could exceed $750m, the start-up said.

In tandem, C4 announced a $73m Series A round featuring significant involvement by angel investors, including Chairman Marc Cohen, who helped fund the initial research at Dana-Farber and led the financing through his Cobro Ventures. Other investors include Cormorant Asset Management, the Kraft Group, EG Capital Group, other angel investors, Roche and Novartis AG. [See Deal]

In an interview with "The Pink Sheet" DAILY, Cohen elaborated on the start-up's plan to address a broad range of potential therapeutic areas through partnerships but said he couldn't comment on whether a collaboration with Novartis might be forthcoming. The deals C4 does sign will be target-based, rather than indication-based, he explained, due to the nature of its technology platform.

"The Degronomid technology that we're bringing to market goes after certain disease-causing protein targets, so it only makes sense to have a target-based strategy," Cohen said. "It's very much a divide-and-conquer strategy in the sense that by working with multiple partners, we can address different disease indications all at once.”

He said the technology has a strong oncology focus, especially because of the company’s heritage coming from Dana-Farber, but that the opportunity is broad and covers other indications, such as central nervous system disorders, for example. He added that it can be applied “anywhere that you have disease-causing proteins."

C4 will be a brick-and-mortar company housed at the former Vertex Pharmaceuticals Inc. site in Kendall Square, which Cohen predicts will enable it to attract top scientific talent. The firm will conduct discovery, chemistry and biology work on multiple targets at once, Cohen said. No details about the type of work being pursued with Roche were disclosed, but longer-term C4 thinks its technology offers promise not just in cancer and CNS, but potentially cardiovascular and gastrointestinal disease, as well as protein-implicated orphan disorders.

"I think that's one of the benefits that we have being funded mostly by an angel group – we are a very long-term play, it's a very patient-centric play, and so to the degree that we can bring to market therapies that will help people, that's what we're all about," the exec said. "We're not building C4 just to build a company and flip it, so we expect that C4 will be around in 20 years and we'll make 20-40 drugs and that's very exciting to us."

Plans For Proprietary Drug Development Too

Beyond partnering, C4 plans to begin developing its own proprietary pipeline, although, again, Cohen was mum as to details on targets or therapeutic areas.

"We have a strong desire and intent to move forward with our own proprietary targets," he said. "That's one thing that makes our Series A unusual in that we're very much at the stage of a company that's doing a Series B from a technology maturity standpoint."

He noted the firm should be able to move into the clinic with two clinical targets in 18-24 months, which will be the beginning of its proprietary pipeline.

Whether C4 will develop the selective small molecules to be joined with its Degronomids will depend on the target, Cohen said. In some cases, a partner may bring a proprietary ligand to the table, but in others C4 will be left to discover the therapeutic payload itself. "The goal is to pick the best ligand in the least amount of time," he explained.

While the Degronomid technology and the research in-licensed from Dana-Farber are proprietary, C4 does not have the targeted protein degradation (TPD) therapeutic space all to itself. In fact, Roche has made multiple plays in this developing area. Last October, through its Genentech Inc. subsidiary, it licensed rights to Arvinas Inc.'s PROTAC (proteolysis-targeting chimera) drug candidates against multiple undisclosed targets [See Deal]. Arvinas also is partnered with Merck & Co. Inc. to develop drugs using the PROTAC platform (Also see "Arvinas Finds First Partner For Protein-Degradation Technology In Merck" - Pink Sheet, 7 Apr, 2015.).

"It's definitely a space that has a lot of activity and we're not the only ones working in targeted protein degradation," Cohen noted. "The mechanism that we're using is one that other companies that we know of to date are also working with or experimenting with. From our perspective, that's a good thing, because you want validation. It's very rare that good ideas exist as singularities, so we believe that the fact that there were other companies already working in or exploring the space was very positive from our investors' perspective."

"Our goal is to be one of the significant players in this space, which we think has many advantages and opportunities to create a whole new class of drugs that are significantly more efficacious than what we've seen on the market to date and to go after traditionally undruggable targets," he added.

C4's Series A total is larger than all but 12 rounds pulled down by biopharma start-ups since the beginning of 2011, according the Strategic Transactions database. There have been nine such rounds over that span that exceeded $100m, led by the massive $600m raise brought home last November by Christopher Viehbacher's Boston Pharmaceuticals Inc. (Also see "Big Rounds, Big Bucks For Biotechs In 2015" - Scrip, 8 Dec, 2015.). Also in recent months, Codiak BioSciences Inc. launched with an $80m A round to fund its work in exosome-based therapies and diagnostics [See Deal].