Galera Therapeutics Inc., a Malvern company building a drug to reduce painful side effects of cancer radiation, has raised $70.2 million in new equity investment from East Coast-, Europe-, and China-based investors led by Clarus Ventures, Cambridge, Mass. The investors will advance an additional $80 million, for Galera to repay from future sales, when its drug, currently code-named GC4419, goes commercial.
Galera will use the $150 million to complete clinical trials and start new ones and build up a sales and marketing staff, chief executive Mel Sorenson, said in an interview.
Why is Galera growing, instead of selling out? The last time Sorenson, a GlaxoSmithKline veteran, ran a cancer-fighting start-up this promising, he sold Ascenta Therapeutics to Sanofi for $398 million. That was in 2010. Galera, like Ascent, has also received a lot of interest from big companies interested in buying the company or licensing its technology, Sorenson said Wednesday.
But instead, "we decided on the unusual step of raising such a large round, because the investor interest was so high," Sorenson said. "In general, if you have a treatment that's working, it's best to take it as far as you can on your own. We want to get this on the U.S. market as soon as possible." That would put Galera in a better position to continue expanding or sell at a higher premium.
The company currently employs 18, plus a larger group of consultants. "We will be growing," and adding staff, with the new investments, Sorenson said. He called the Philadelphia region, with its medical schools and drug research labs, a good place to grow such a business. "Philadelphia has one of the most educated populations in the biopharma medical field," both for developing therapies, and for their sales and marketing, he said.
First, Galera plans a Phase 3 trial this fall, "the last step before we get on the market" as a treatment to reduce mucositis in the nation's 40,000 annual head-and-neck cancer radiation patients, Sorenson said. Radiation is effective on head and neck cancers, but it generates a lot of mucous in patients' mouths, which leads to infections difficult to treat. The previous double-blind, randomized study tested 223 patients at 44 sites, mostly in the United States. The last trial will be larger.
Galera also plans to start trials focused on lung cancer patients, who face mucous infections in the esophagus, and those with other conditions where radiation therapy generates excess body fluid that leads to infections. Around half of all cancer patients get radiation treatment, and many of those are a potential market for Galera, the CEO said.
The drug works by rapidly converting superoxide, an irritant that is a byproduct of radiation treatment, into hydrogen peroxide, which healthy tissue can readily process.
Besides Clarus, whose managing director Emmett T. Cunningham Jr. will join the Galera board, other first-time Galera investors contributing to the $150 million include Adage Capital Management, Boston; HBM Healthcare Investors, Switzerland; Nan Fung Life Sciences, Hong Kong; RA Capital, Boston; Rock Springs Capital, Baltimore; and Tekla Capital, Boston.
Previous investors — Correlation Ventures, Galera Angels, New Enterprise Associates, Novartis Venture Fund, Novo Ventures, and Sofinnova Ventures — also bought into the new round of financing. Galera had raised $68 million in previous equity rounds, bringing the total committed by investors to at least $212 million since the company moved to suburban Philadelphia from its original home in Missouri.
"This significant raise further validates the dramatic and meaningful results of our randomized Phase 2b clinical trial and the potential of GC4419 to revolutionize radiotherapy," Sorenson said in his statement.