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March 1, 2021

New Haven’s Artizan Biosciences raises $11M; inks licensing deal with Biohaven

PHOTO | Contributed James Rosen
By Natalie Missakian

A New Haven biotech focused on curing inflammatory bowel disease by targeting bacteria that live in the digestive tract has raised $11 million in a financing round that includes an investment from an Elm City drug maker.

Yale spinout Artizan Biosciences Inc. said Monday that New Haven migraine-pill maker Biohaven Pharmaceuticals joined existing investor Hatteras Venture Partners in leading the Series A-2 round.

The startup also announced a licensing deal with Biohaven, giving it an option to develop and commercialize up to three of Artizan’s drug candidates to treat inflammatory bowel disease (IBD), a group of inflammatory conditions of the small intestine and colon that includes ulcerative colitis and Crohn’s disease.

Under the deal, Artizan is eligible for option exercise and milestone payments, as well as tiered royalties, based on the market potential of each product, the company said. Financial terms were not disclosed. 

Additionally, Biohaven will collaborate with Artizan to develop treatments for neurological diseases by harnessing the so-called gut microbiome. 

In a phone interview with New Haven Biz Monday, CEO James Rosen called Biohaven’s interest in the company a powerful validation of its discovery platform. 

“We’re enthusiastic about collaborating with them given their outstanding performance as a company and their expertise internally,” he said. 

More importantly, the partnership also allows Artizan to broaden its focus from gastrointestinal disorders to inflammatory diseases of the central nervous system, Rosen said.  “It is something that we have been enthusiastic about trying to accomplish as a company.” 

Artizan’s research is based on proprietary technology developed by Yale School of Medicine immunologists Richard Flavell, Noah Palm and Marcel R. de Zoete, who co-founded the startup in 2016.  

Its latest funding follows a $12 million Series A round in 2019 and brings the five-year-old startup’s total venture capital raise to $23 million.

Other investors in the round include Connecticut Innovations, the state’s venture capital arm, as well as existing investors Elm Street Ventures and Osage University Partners. 

Artizan said it will use the funding to continue its preclinical research surrounding IBD and to explore additional disease targets. 

The company’s initial focus is on strains of troublesome bugs inhabiting the gut that secrete “virulence factors” believed to cause IBD, Rosen explained. 

Artizan has identified compounds that can inhibit the production of these secretions, potentially eliminating the disease. It expects to announce its first drug candidate by the end of this year and hopes to be testing it in humans by the end of 2022. 

Artizan, which has a dozen employees, including 10 in Connecticut, is the second young Elm City startup to attract an equity investment from Biohaven, which itself is a Yale spinout. 

Best known for its new migraine drug Nurtec ODT, which launched in 2020, Biohaven held a 42% stake in oncology biotech Kleo Pharmaceuticals before acquiring that company in January. 

It has since opened a new discovery research arm, Biohaven Labs, in Kleo’s former Science Park lab, which is located right next door to Artizan. 

Artizan also announced Monday that Dr. Donnie McGrath, Biohaven’s chief of corporate strategy and business development, and Dr. Seth Rudnick, a retired partner at Westport venture capital firm Canaan Partners and chair of North Carolina-based biotech Liquidia Technologies, will join its board in connection with the financing.  

Contact Natalie Missakian at news@newhavenbiz.com

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