Nexo allies with MD Anderson in pursuit of covalent cancer drugs

Nexo Therapeutics, a new covalent drug startup, said Wednesday it raised $60 million and unveiled a five-year research partnership with the University of Texas MD Anderson Cancer Center.

Backed by Versant Ventures, New Enterprise Associates and Cormorant Asset Management, the biotechnology company was co-founded by Andrew Phillips, the former CEO of cancer drug developer C4 Therapeutics.

Phillips left C4 in 2020 and joined Cormorant, where he worked with later-stage biotechs. But he wanted to return to the startup world and was drawn to the idea of building a company around covalent drugs, or medicines that firmly lock onto their targets. 

He was already talking with Carlo Rizzuto, a managing director at Versant who he knew from serving together on two other companies’ boards of directors. By August, Phillips had begun working on what would become Nexo, which has facilities in Colorado and Massachusetts.

Nexo, which in Portuguese means “connection,” is “at the intersection of emerging science, drug discovery, academia and biotech, where we think we can create value,” Phillips said.

The company said its technology can better identify promising compounds, particularly against targets that historically haven’t been easy to reach with covalent drugs. 

Typically, these medicines bind in some fashion to the amino acid cysteine on their target protein. But cysteine isn’t always present or easy to aim at, limiting how covalent drugs can be deployed. Scientists at Nexo believed their technology could help them move beyond cysteine-based binding.

With its approach, Nexo is taking part in a wave of new research to more thoughtfully design covalent drugs, which historically were often discovered by accident. These drugs, which include common medicines like aspirin and penicillin, tightly bind to their targets. 

Those strong bonds can mean a more potent drug effect, but they also increase the challenge of finding the right target as well as raise the risk of more serious side effects.

In recent years, pharmaceutical firms such as AbbVie and AstraZeneca have had success with covalent drugs for cancer, like ​​Imbruvica and Tagrisso. 

Startups have joined in, too, with young biotechs like Matchpoint Therapeutics, Terremoto Biosciences, Enlaza Therapeutics and now Nexo raising sizable funding rounds of late. 

Nexo has not disclosed which cancers it is targeting, and may explore other diseases in the future.