Peninsula biotech raises $95 million to target diseases wreaking havoc on the immune system

A South San Francisco biotech startup focusing on immune-mediated diseases — from lupus to transplant rejection — assembled a $95 million Series B round, raising its total funding to more than $220 million in less than three years.

Human Immunology Biosciences — or HI-Bio — said Thursday the fresh funding for its work in immune-mediated diseases, or IMDs, came from new investor Alpha Wave Global. Also participating were Viking Global Investors and Arkin Bio Capital as well as existing investors Jeito Capital and ARCH Venture Partners.

The company, which currently has about 45 employees, plans to add 10-15 people over the next year, said CEO Dr. Travis Murdoch.

HI-Bio's lead drug, a monoclonal antibody called felzartamab, targets CD38, a protein expressed on the surface of mature plasma cells. The drug is in four Phase II trials for a kidney condition known as primary membranous nephropathy; IgA nephropathy, where the eponymous protein builds up and damages the filtering function of the kidney; antibody-mediated transplant rejection; and lupus nephritis.

The story of CD38 is similar to that of the protein CD20, which was targeted by Genentech Inc.'s Rituxan, Murdoch said. Initially, CD20 was aimed at lymphoma, a type of blood cancer, but doctors treating patients with autoimmune diseases started to see dramatic effects on depleted infection-fighting white blood cells, called B cells, in some patients. Rituxan now is approved for some cancers as well as rheumatoid arthritis and a handful of other IMDs.

CD38 is a different compartment, plasma cells, but could be used in a similar way in subsets of patients in the broad IMD space, Murdoch said.

"Much of the work we're doing is in rare diseases, but the clinical impact of a therapy could be massive," Murdoch said, noting in particular antibody-mediated transplant rejection, which is the leading cause for losing a transplanted kidney, and primary membranous nephropathy, where there are no Food and Drug Administration-approved therapies.

"We're focused on diseases where the need is high and there's a good population and clinical endpoints," Murdoch said.

Another drug, HIB-210, is in a Phase I safety study. It is designed to activate and aid the movement of neutrophils, a type of white blood cell that is the immune system's first line of defense.

Murdoch, a former director and senior advisor at SoftBank who focused on gastroenterology and inflammatory bowel disease as an academic researcher, said about 4% of the world's population has an IMD. HI-Bio's approach can more finely target the broad IMD space, he said, so the right drug can be delivered to the right patient at the right time.

"Ten years ago, I was part of the early work on treatment targets in inflammatory bowel disease, and I got to thinking about what we saw in oncology," Murdoch said.

Felzartamab was licensed by HI-Bio from Germany's MorphoSys AG (NASDAQ: MOR). In exchange for it and HIB-210, MorphoSys took a 15% equity stake in HI-Bio.

Now HI-Bio hopes to generate proof of concept around felzartamab's mechanism of action and maybe push the drug into a late-stage clinical trial later this year or in 2025.

"We're seeing these deep antibody responses that seem to be durable," Murdoch said. "There's the potential to have a disease-modifying impact in these conditions. As a physician, that's something I'm very excited about. We think it's a game-changing therapeutic option here."