2021-10-21| Funding

ShouTi Raises $100M in Series B to “Replace Biologic Injections with Pills”

by Joy Lin
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San Francisco and Shanghai-based ShouTi wants to replace biological drugs with small molecules that can mimic their function. The clinical-stage biopharma has recently emerged from stealth mode with a $100 million Series B round, led by BVF Partners.

The slew of new investors joining the financing round includes Casdin Capital, Cormorant Asset Management, Janus Henderson Investors, Lilly Asia Ventures, Monashee Capital, Sage Partners, Stork Capital, Surveyor Capital (a Citadel company), TCG X, Terra Magnum Capital Partners, Woodline Partners LP, and Schrödinger. 

Existing investors also participated, including Eight Roads, F-Prime Capital Partners, Qiming Venture Partners, Sequoia Capital China, TF Capital, and Wuxi AppTec.

The new capital will provide a leg up for the small molecule programs the company is developing with its structure-based drug discovery platform.

Related Article: Expanding Deals and Investments Underscore Burgeoning Market of Targeted Protein Degradation


Designing Small Molecules to Replace Biologics

At the heart of ShouTi’s R&D are small molecules targeting G protein-coupled receptors (GPCR), a popular drug target due to their prevalence in many chronic diseases. Treatments that target the family of proteins are thought to make up a third of FDA drug approvals.

The company’s drug discovery platform utilizes machine learning and computational methods optimized for discovering GPCR-targeting drugs.

ShouTi believes their products will be superior to biological drugs such as antibodies or peptides. A key advantage is that small molecules can be made into oral pills, while biologics can only be administered by injection or infusion, which are more invasive procedures.

Oral biologics are a long way from entering mainstream treatments, as powerful barriers posed by the gastrointestinal tract prevent the drugs from reaching the bloodstream.

ShouTi’s most advanced pipeline candidate is a Phase 1 program for pulmonary arterial hypertension, a condition where blood vessels in the lung are blocked, causing a rise in blood pressure.

Another program investigating a Type 2 diabetes drug is in preclinical testing. A third candidate is in the discovery phase for idiopathic pulmonary fibrosis, where the buildup of scar tissue in the lungs causes breathing difficulties. 

Related Article: Addressing The Global Need for Biosimilars: Current Trends, Expectations and Real World Experiences


Founding and Funding

ShouTi was co-founded in 2016 by serial entrepreneurs Raymond Stevens and Richard Friesner. The latter is also co-founder of Schrödinger, a company developing software systems for drug discovery. 

Schrödinger even now counts as a strategic collaborator to ShouTi and has an 8.7% stake in the company. ShouTi is not the only one with demand for Schrödinger’s services; many clients, including Sanofi and Takeda, are using software developers’ data-driven technology.

On the other hand, ShouTi CEO Stevens had notably co-published the first high-resolution structure of a human GPCR protein. Before his current position at ShouTi, he had launched four successful biotechs: Syrrx (1999), MemRx (2002), Receptos (2005), and RuiYi (2011).

MemRx was acquired by Sagres Discovery before the latter became a part of Novartis in 2005. The same year, Syrrx was acquired by Takeda in 2005 for around $250 million. Meanwhile, RuiYi was sold to Anaphore in 2012 and renamed Bird Rock Bio.

Later on, Celgene took an interest in Receptos’ S1P1 agonist for patients with multiple sclerosis (MS) and snapped up the company for $7.32 billion. The MS drug was approved by the FDA in 2020 and is now sold under the brand name Zeposia by BMS following its takeover of Celgene.

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