Principia Biopharma Inc. has raised $50 million to advance the company's pipeline of small-molecule autoimmune and oncology therapies into clinical testing. Sofinnova Ventures led the funding, citing strong preclinical validation of Principia's pipeline and its prolific drug discovery engine.

The series B round will help the South San Francisco-based company move three oral therapies into clinical testing, including its most advanced, an inhibitor of Bruton's tyrosine kinase (BTK). The company also is developing a drug to inhibit fibroblast growth factor receptor for the treatment of solid tumors, and an interleukin 17 pathway inhibitor that it said could be beneficial in a range of autoimmune and inflammatory diseases.

Principia already has banked a significant portion of the tiered financing, said Martin Babler, CEO, with the remainder due once the company meets pre-specified criteria. "We believe we can advance the programs to some significant value inflection points before needing the second tranche," Babler told BioWorld Today. The key, he said, is to transition the company into the clinic, getting its top three candidates into phase I and in, some instances also phase II, while at the same time continuing to take advantage of its drug discovery platform.

Building on technology licensed from the University of California, San Francisco, Principia's drug discovery platform helps it develop reversible, tightly binding covalent therapies. The method helps the company create selective molecules that are optimized for both potency and durability, allowing for stronger on-target effects and very few off-target effects. The approach makes durability "tunable," Babler said. (See BioWorld Today, Oct. 30, 2012.)

"If you could make an ideal drug, you'd want one that has durable binding to the relevant target, but low exposure for the rest of the body," he added. Principia's platform allows for that, delivering potent compounds where they're needed and then, after an extended period of time, uncoupling to be degraded.

"While there are BTK inhibitors ahead of us in the clinic for autoimmune disease, all those that have made it into the clinic are irreversible inhibitors and may have safety profiles that may make it harder to apply them in autoimmune diseases where patients would be using a therapy chronically over a long period," Babler said.

The 30-person company, which takes its name from Newton's first principal, has raised almost $86 million since starting operations in March 2011. That includes a tiered series A round totaling $36.3 million led by New Leaf Venture Partners, OrbiMed Advisors, Morgenthaler Ventures, SROne and Mission Bay Capital, all of which participated in the current round.

"In just over three years, the company's prolific chemistry and biology platform has led to advancing multiple programs in the fields of autoimmune disease and oncology, with an exciting level of preclinical validation to date," said Srinivas Akkaraju, a general partner at Sofinnova, who joined the company's board as part of the investment.

In addition to the programs that Principia is advancing on its own, the company also has a highly specific JAK3 inhibitor, an RSK inhibitor and a third, undisclosed program that it will consider out-licensing to partners. Discussions on that front are under way, but nothing firm has developed yet, Babler said.

"When you look at today's market for immunotherapies, most are still injectable therapies," he said. "If you can create a safe and effective oral BTK molecule, you can compete with those because you have a pill that addresses both the underlying issue of the auto-antibodies and at the same time addressing the inflammation."

Principia has yet to disclose any specific indications it is targeting, but Babler said that, based on the mechanism, the company will evaluate its BTK program in rheumatoid arthritis, Sjögren's syndrome and myasthenia gravis, a neuromuscular disorder. In oncology, the company is also looking at chronic lymphocytic leukemia, non-Hodgkin lymphoma and other hematological malignancies.

In other financings news:

Agios Pharmaceuticals Inc., of Cambridge, Mass. said it will sell 2 million shares of its common stock to fund the company's clinical and research development activities. Agios is granting its underwriters, J.P. Morgan Securities LLC, Goldman, Sachs & Co., Cowen and Co. LLC and Leerink Partners LLC, a 30-day option to purchase up to an additional 300,000 shares of common stock sold in the offering. The company started a phase I dosing study of its lead candidate for inborn errors of metabolism, AG-348, in April. Shares of Agios (NASDAQ:AGIO) gained $6.33, or 15.4 percent, to close Tuesday at $47.54. (See BioWorld Today, April 18, 2014.)

Avalanche Biotechnologies Inc., of Menlo Park, Calif., said it completed a $55 million series B financing. New investors were led by Venrock and included Deerfield, Adage Capital Management, Redmile Group, Rock Springs Capital, Sabby Capital, as well as an affiliate of Cowen and Co. and two undisclosed blue chip health care funds and existing investors. Cowen and Co. acted as sole placement agent. Proceeds are expected to advance the firm's clinical programs in retinal disorders, including lead product AVA-101 for wet age-related macular degeneration, and to support manufacturing and clinical infrastructure and accelerate development of pipeline programs based on Avalanche's Biofactory adeno-associated virus-based gene therapy platform.

Lorus Therapeutics Inc., of Toronto, said underwriters partially exercised their overallotment option to purchase an additional 6.5 million common shares at a price of 50 cents per common share, in connection with its April 10 public offering. As a result of the exercise of that option, Lorus received additional gross proceeds of about $3.3 million and will have raised total gross proceeds of about $28.3 million.

Rxi Pharmaceuticals Corp., if Marlborough, Mass., said it entered a purchase agreement with Lincoln Park Capital Fund LLC (LPC), whereby LPC is committed to purchase up to an aggregate of up to $20 million shares of Rxi common stock over a 30-month term. The funds, in part, will serve to advance research and development activities for the company's ophthalmological preclinical drug pipeline. Under the terms, upon execution, LPC purchased 500,000 shares at $4 apiece, a premium of 7.5 percent based on Monday's closing price, for an initial investment of $2 million. Concurrent with the execution, Rxi issued to LPC 100,000 shares of our common stock as a commitment fee. Upon filing of the first investigational new drug application, LPC will make an additional $1 million share purchase at prevailing market prices. At the sole discretion of the company, it may sell up to $17 million worth of common stock to LPC over the term of the purchase agreement. Shares of Rxi (NASDAQ:RXII) gained 29 cents to close Tuesday at $3.99.