Taiho Ventures has supplied a $10m extension for Caltech spinout Axial Biotherapeutics’ series B, bringing the total to $35m.

Axial Biotherapeutics, a US-based biotechnology developer spun out of California Institute of Technology (Caltech), boosted its series B round to $35m on Thursday following a $10m extension provided by pharmaceutical firm Taiho. Taiho supplied the money through its corporate venturing arm, Taiho Ventures. Axial closed an initial $25m tranche in February 2019 led by Health for Life Capital, a fund managed by Seventure Partners, with participation from healthcare provider Heritage Medical Systems. Investment management firms Longwood Fund and Domain Associates, as well assorted angel investors, also took part in the first series B close. Founded in 2016, Axial Biotherapeutics is developing therapies for diseases linked to the central nervous system and the human gut microbiome. Its initial focus is on neurological conditions such as Parkinson’s and autism spectrum disorder. Taiho’s funding will go towards the discovery and development of a gut-targeted treatment in oncology. Axial will retain control of these programs, but Taiho Ventures will have a first right to negotiate an exclusive licence. Sakae Asanuma, president at Taiho Ventures, will join Axial’s board of directors. Axial Biotherapeutics advances research led by Sarkis Mazmanian, the Luis B. and Nelly Soux professor of microbiology and Heritage principal investigator, who co-founded the company with chief executive David Donabedian, formerly a venture partner at Longwood Fund. The spinout previously secured $19.2m in a series A round co-led by Longwood Fund and Domain Associates, with participation from Heritage Medical Systems, Kairos Ventures and a range of private investors in 2016. Asanuma said: “We are excited to partner with Axial as we see astounding potential in its platform approach to drug development beyond central nervous system indications. As such, we are eager to work with the team to identify therapeutic interventions harnessing the gut-brain axis where the company’s novel technology can be applied. “We look forward to supporting David Donabedian and the Axial team.”

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Thierry Heles

Thierry Heles is the editor of Global University Venturing, host of the Beyond the Breakthrough interview podcast and responsible for the monthly GUV Gazette (sign up here for free).