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Technology Montreal cancer drug developer Repare raises $68-million

Canada’s red-hot biotech sector notches another big financing, led in part by San Francisco-based Versant Ventures, which has now created, incubated and financed six domestic firms.

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A Montreal biotech startup has secured a huge early-stage financing as it aims to build on an emerging global trend of developing "precision oncology" drugs that target cancerous tumours.

Repare Therapeutics Inc., led by veteran Montreal biotech executive Lloyd Segal and co-founded by a trio of research scientists from New York University and Toronto's Mount Sinai Hospital, has raised $68-million (U.S.) in a deal co-led by San Francisco-based Versant Ventures and Boston's MPM Capital, and backed by U.S. drug giant Celgene Corp. and Canadian investors Fonds de solidarité FTQ and BDC Capital.

It's the sixth Canadian firm to be created, incubated and financed by Versant, one of the most active foreign investors in Canada's reviving biotech industry. Since 2003, Versant has opened incubators in Vancouver, Toronto and Montreal and its six firms here have raised a combined $600-million-plus (Canadian), led by Toronto-based regenerative medicine developer BlueRock Therapeutics's $225-million (U.S.) financing last fall from Versant and Bayer AG.

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Versant, with $2.3-billion under management, isn't just a financier but a company creator, staffed by doctors and researchers who build firms around science and scientists in partnership with global pharma giants. Sixty-five Versant-backed firms have been acquired or gone public since 1999.

The Repare deal "is emblematic of Versant," said Versant's Vancouver-based managing director, Jerel Davis. "We're building a company from scratch, it's globally competitive and it's financed to do so."

The Canadian biotech sector has been on an upswing, less than a decade after retrenching as pharma giants downsized their research labs in Canada and several domestic biotech startups disappeared. Canadian life-sciences firms raised $1.1-billion (Canadian) in venture capital last year – double 2015 levels – and, in April, Vancouver-based cancer-therapy developer Zymeworks Inc. completed the largest Canadian biotech initial public offering in a decade, raising $59-million (U.S.).

That followed one of the largest share sales ever by a Canadian biotech firm as lupus drug developer Aurinia Pharmaceuticals sold $150.5-million in stock in March. Montreal's Clementia Pharmaceuticals Inc., which is developing a treatment for a rare genetic condition, is also set to go public this year, sources say.

A Clementia spokesman declined comment.

In addition to Versant, a small, savvy group of Canadian investors, including Lumira Capital – a supporter of Zymeworks and Aurinia – CTI Life Sciences, Genesys Capital Management, BDC and Teralys Capital have been active in the local biotech scene.

Repare is in the early stages of developing products that attack genetic defects in certain cancerous tumours, preventing the toxic cells from repairing their DNA. A global race is on to commercialize similar types of molecules known as PARP (poly ADP-ribose polymerases) inhibitors: AstraZeneca PLC received U.S. regulatory approval in 2014 to sell its drug, Lynparza, to target some forms of ovarian cancer, while U.S. firms Clovis Oncology Inc. (previously backed by Versant) and Tesaro Inc. followed suit with rival treatments in the past year.

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Lynparza accounted for just $218-million of AstraZeneca's revenue in 2016 but is expected to become a big seller as the company advances the drug in trials to treat a range of cancers.

Mr. Segal leads a seasoned leadership team, including research and development head Michael Zinda and vice-president of discovery Cameron Black, previously senior executives with AstraZeneca and Merck & Co. Inc.'s Canadian unit, respectively.

"Our focus is on putting our heads down and developing great drugs," Mr. Segal said, adding Repare can now proceed "without the constant cycle of fundraising."

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