Linnaeus Therapeutics raises $4.5M to launch melanoma drug trial

A South Jersey-based cancer treatment startup is raking in the cash this year with funding from both institutional investors and federal programs. 

Linnaeus Therapeutics recently closed on an almost $4.5 million addition to its Series B, which will help the company run its next clinical trial and expand its team, CEO Pat Mooney told Technical.ly. Last month, the company also announced $22 million from the Advanced Research Projects Agency for Health’s (ARPA-H) PROSPR Program, which supports therapies aimed at preventing age-related disease and extending lifespan. 

“We’re using this money that we just raised to start the clinical trial,” Mooney said, “but we’ll use the ARPA-H money to follow the science and see if we can prolong resilience.” 

Founded in 2016, the company spun out of chief scientific officer Chris Natale’s Ph.D. research at the University of Pennsylvania. Natale was studying why women diagnosed with skin cancer tend to have better outcomes than men. 

According to his research, estrogen can influence the growth of skin cancer cells, even though melanoma cells do not have the usual type of estrogen receptor found in female reproductive tissues. 

Natale discovered that this effect comes from GPER, a different kind of estrogen receptor that is present on many types of cells, including melanoma. Activating GPER appears to slow the growth of these cancer cells and make them behave in a less aggressive way. 

Linnaeus Therapeutics developed a drug that specifically activates GPER, and the company plans to test it in melanoma patients whose cancer did not respond to immunotherapy.

While its main focus up until now has been cancer treatment, the company recently started exploring alternative applications to the drug. 

During its phase one clinical trial, data showed that it also helped improve the overall health of people with hypertension, diabetes, high cholesterol and obesity, Mooney said. 

“There’s really something writ large about this hormonal signaling axis of estrogen flowing through GPER,” Mooney said. “That we believe we can tap into to treat multiple diseases of aging.” 

Government grants versus private equity

It’s difficult for biotech companies to raise money in general. 

In the Philadelphia region, founders often say there aren’t enough local investors. Plus, there’s been uncertainty among federal funding programs, like the SBIR/STTR program, which just reopened after a five-month lapse in funding. 

Early on, Linnaeus struggled to grab investors’ attention as a company working on small-molecule research, not trending science like cell and gene therapy. Those tensions pushed the company to apply for non-dilutive funding, Mooney said.

At first, Mooney funded business operations while Natale finished his doctorate. When Natale graduated in 2018, the company received a grant from the federal Small Business Technology Transfer (STTR) program, a program designed to help technologies developed at research institutions go to market.

This year, life sciences leaders seem to be optimistic that the industry is bouncing back. Especially in Philly, where multiple companies have already announced raises. 

To date, Linnaeus has raised $32 million in equity capital through private investors, $31 million through federal programs like STTR and ARPA-H and $8.3 million in grants from the National Cancer Institute, Mooney said. 

“[Government] grants were hugely helpful for us in the beginning, and they still continue to be,” Mooney said. “[They] do provide validation that you can then leverage into raising more money.”