Southlake Biotech OncoNano Medicine Raises $50M in Series B to Accelerate Cancer Tech Toward Commercialization

Southlake-based OncoNano Medicine, a spinout of University of Texas Southwestern that develops products to diagnose and treat cancer, has raised around $50 million in Series B financing to continue the momentum of its technology, which the biotech says can diagnose and treat cancer with high specificity.

The investment was led by the healthcare investment team at Advantech Capital, a private equity fund based in China that focuses on growth opportunities in TMT, pharmaceuticals, and healthcare.

Part of the funding will support OncoNano’s Phase 3 clinical trials in the U.S. and Europe for pegsitacianine. Described by the biotech as “an innovative real-time imaging agent,” pegsitacianine is used in the intraoperative surgical resection of solid tumors. OncoNano describes the trials as pivotal.

The capital will also be used to accelerate the advancement of the company’s innovative lead product, OHM-100, that helps visualize a tumor to distinguish it from normal tissue. The immune-therapeutic is OncoNano’s first development program, and was formulated with its core delivery technology.

ONM-100 can help surgeons find tumors during surgery by making cancerous tissue “light up,” according to Co-Founder Ravi Srinivasan. The imaging allows for more precision to ensure that tumors are fully removed during surgery. Last year, the product was granted a fast track designation from the Food and Drug Administration (FDA).

During its initial clinical trials, researchers learned that ONM-100 also can be used to image and stage metastatic disease, which represents some 45 to 50 percent of all cancer diagnoses and is the cause of 90 percent of patient deaths.. That has the potential for saving lives: The improvement of visualization of metastatic disease—preoperatively and during surgery—is closely tied to patient survival.

Better visualization of tumors is “critical for diagnosis, staging, therapeutic choice and efficacy,” OncoNano says.

With the Series B, the company plans to continue the momentum it has already built. By 2022, CEO Martin Driscoll aims to submit an IND (Investigational New Drug) application for OncoNano’s first therapeutic development program.

OncoNano has a number of products in the works, all that use its proprietary pH-activated micelle platform.

ONM-501, OncoNano’s second development program, is a next generation STING (STimulator of INterferon Genes) agonist. According to the company, it is advancing towards a first in human trial in the second half of next year.

ONM-500, which is funded by the Cancer Prevention and Research Institute of Texas (CPRIT), uses the startup’s pH-sensitive micelle technology to deliver antigens to activate immunity for the treatment of cancers caused by the human papilloma virus (HPV).

Last year, OncoNano also received a $9.97 million grant from CPRIT—a partner since the startup’s founding—to expand uses for OHM-100.

“The funds from this Series B raise combined with the support of our partners from CPRIT provide the resources to operate our company for several years, advance pegsitacianine further towards commercialization, and progress our novel immuno-oncology compound, ONM-501, through our Phase 1a/1b clinical program,” Driscoll said in a statement.

According to the CEO, the inclusion of the new capital gives the team the capability to accelerate its development programs and work to achieve its goal of “bringing novel interventions and treatments to cancer patients.”

OncoNano, launched in 2014, uses UTSW technology invented by Dr. Jinming Gao, professor of pharmacology and otolaryngology, and Dr. Baran D. Sumer, associate professor of otolaryngology. The two professors co-founded OncoNano along with Srinivasan.

The biotech mainly focuses on using pH as a biomarker to diagnose and treat cancer with high specificity. Its products aim to help patients across the continuum of cancer care.

“We are impressed with the potential for OncoNano’s innovative core technology,” Benjamin Qiu, partner at Advantech Capital, said in a statement. “We see great promise in OncoNano and are excited to support the company through its further advancement of pegsitacianine into a pivotal clinical development program and its novel dual-activation STING agonist towards a first in human study to help address the persistent and challenging unmet needs in cancer surgery and treatment.”