S&S #6: DISCO-vering New Frontiers in Cancer Treatment

Greetings!

If this is your first time reading, thanks for dropping by. Every week, I take a dive into the seed funding markets in North America and Europe, giving an overview of overall activity and covering the company I think is most interesting with a little more depth. 

If that sounds interesting to you, might as well subscribe!

If you’re one of my seventy-one loyal followers, know I appreciate you. When I was taking a look at my Substack stats the other day, I realized that Seeds and Speculations has gone global. I know it may not seem like much, but to someone who genuinely does this just because he enjoys it, it’s pretty cool that there are people around the world who care enough to keep up. 

To my two subscribers in Canada, one subscriber in Brazil, one subscriber in Argentina, three subscribers in the UK, one subscriber in France (thx, Mike), one subscriber in Germany, two subscribers in Turkey, two subscribers in India, one subscriber in South Africa, one subscriber in South Korea, one subscriber in Australia, and forty-nine subscribers in the good ol’ US of A… thank you. 

If you’re still enjoying these, please consider sharing with your other tech enthusiast friends, coworkers, acquaintances, and enemies. 

Let’s jump into the content, shall we? 

Seeds of the Week(s)

From January 8th to January 19th, 140 companies raised a seed round in either North America or Europe. 118 companies disclosed their round size, and of those, these are our cash cows from the past couple of weeks: 

• Fullcast: Fullcast is an end-to-end revenue operations platform built to align sales planning with sales execution. Platform features include an AI-enabled territory management solution, data hygiene management, lead routing, quota setting, and rep performance tracking. They raised $34M in a round led by Epic Ventures on January 15th.

• DISCO Pharmaceuticals: DISCO Pharma is a BioTech transforming cancer care by exploring the cell surfaceome to identify new drug targets. (I’ll leave it at that, as they’re also our FEATURED company this week. More to come.) They raised $22M in a round including Sofinnova Partners, M Ventures, and AbbVie Ventures on January 16th. 

• Better Foods: Better Foods is a producer of plant-based meat, offering a line of “Cold-Cuts”, “Sausage Patties”, and “Meatballs” made from soybeans, dietary fiber, and vegetable oil. They raised $15M from Cleveland Avenue on January 11th.

• Rainbow: Rainbow is a digital insurance platform built to service restaurants. Their model allows owners to adjust their coverage based on monthly sales, integrating with PoS systems for real-time accuracy. They raised $12M from Caffeinated Capital, Altai Ventures, and 8VC on January 12th. 

• Cumulus Oncology: Cumulus Oncology is recognized as Europe’s first oncology biotech studio, specializing in innovating and managing the development of oncology therapy companies. This approach includes managing companies to key development stages and aligning team members with specific scientific areas and development phases. The team is a unique mix of scientists and entrepreneurs, working together to find assets, create spin-outs, and commercialize cancer therapies. They raised $11.4M from Eos Advisory and Scottish National Investment Bank on January 8th. 

Other Innovators 

As always, here are a few more companies I thought were interesting enough to do a quick feature of. 

Bolden Therapeutics

BTRY

Cellvoyant

CALL BACKKKKKKKKKS

We’re so back. 

As a quick reminder, so far in this newsletter, we’ve covered a variety of emerging trends. These have included: 

• Advancements in Quantum Tech 

• Advancements in Neural Networks and AI Foundational Models 

• Alternative Fuels 

• Energy Storage and Renewable Energy

• Space and Propulsion Technologies

Once again, several companies operating in these spaces just raised new seed rounds. 

Atmen, a regulatory tech company specializing in expediting and automating carbon intensity certification, just raised $1.4M from Revent, UnternehmerTUM, and Vireo Ventures. Their focus is on hydrogen and e-fuels certification, directly relating back to a couple of companies we know well…

Speaking of alternative fuels, Genevos and HutanBio just raised $2.75M and $3.61M to further develop a clean hydrogen based fuel cell for passenger boats and a low-carbon biofuel for long-distance travel, respectively.

Electric Fish, a community energy storage company for EV charging infrastructure, just raised an undisclosed amount from undisclosed investors (sorry) to advance their energy storage systems. Their proprietary CoReScore algorithm uses data from electrical grids, vehicle trip-to-tip data, and user demographics to identify where the most impactful locations would be for an EV charger storage system within communities, and their optimization engine ensures energy is stored and released in a manner that produces the results in the cheapest cost per charge for users.

Tibo, an energy monitoring and smart grid controlling platform, also raised $3.3M to optimize grids and the management of complex energy networks, leveraging digital twin technologies and other AI-powered processes. 

Rocketstar, who just raised $2M from undisclosed investors for their Aerospike engines, which produce 25-35% more thrust as compared to standard rocket engines without needing any more fuel to do so. Their rocket's combustion chambers can be controlled individually, allowing for thrust vectoring that eliminates the need for actuators that would weigh down a normal rocket, and they can be reused two weeks after initial usage, a massive improvement on the standard two plus months a traditional rocket needs.

Our Featured Seed of the Week 

This week, we’re venturing into Healthcare, an area we haven’t covered yet. 

As discussed earlier, we’ll be taking a look at DISCO Pharmaceuticals, a company working to transform the landscape of cancer care and treatment by analyzing the surfaceome of the cell (don’t worry… I’ll explain). 

If that doesn’t make you want to dance, I don’t know what will… 

I’m sorry 

Drug Discovery is Damn Difficult 

That’s called alliteration, folks. Yes, I took Honors English in seventh grade. 

Anyways, yes, drug discovery, while it has massive potential and will absolutely result in the development of the next generation of drugs and pharmaceuticals, is incredibly challenging to get right. 

Before we get to why, let’s set the scene.

Another History Lesson 

The development of small molecule therapeutic agents for the prevention and treatment of diseases is a significant, and important, piece of the Healthcare Industry’s pie. 

In the past, the world was a much scarier place due to our limited understanding of biological processes and cellular responses to chemical structures.

In 1900, one-third of all deaths in the US were a result of three general ailments that are all but non-factors today: pneumonia, tuberculosis, and diarrhea. In the modern age of medicine, and thanks to early advancements in drug discovery, now you can drink a bright pink elixir with a catchy theme song and completely eliminate the third issue. 

Drug discovery is an intricate and layered process aimed at developing new medicines. It typically starts with identifying biological targets associated with a disease. Researchers then focus on discovering molecules that can interact with these targets, potentially altering their behavior to treat or prevent the disease. This critical phase sets the foundation for further development and testing of potential drug candidates. 

The first modern-age success story of this process is Penicillin, a “miracle drug” to treat bacterial infections. 

Not long after penicillin was developed, the progression of synthetic organic chemistry began to allow for more large-scale discovery of non-natural drugs or drug candidates. 

The Rise of Synthesis, Structure Determination, and Computing in DD

Synthetic organic chemistry gave scientists the ability to develop non-naturally occurring molecules specifically for medicinal purposes. Common thought was that, if a drug could be envisioned, synthetic chemistry made it possible to be made. 

Around the same time that synthesis began to become more sophisticated, powerful spectrometers and separation techniques for determining the minute qualities of biologically active natural products further drove the DD market forward. 

And finally, with the emergence and growth of computers, and advancements of computing power, came computer-aided drug design, in which programs were used to assist the drug target identification and design process. This involves something called high throughput assays (HTS), a process in which large numbers of chemical compounds are screened to test them for therapeutic use cases rapidly. 

In its most current state, drug discovery processes include: 

• High Throughput Screening (HTS): Automates the testing of thousands of compounds rapidly to identify potential drugs by their activity against biological targets.

• Computational Drug Design: Uses computer models to predict how different chemicals might interact with a target molecule, optimizing drug development and reducing the need for extensive laboratory testing.

• Genomics and Proteomics: These technologies involve studying an organism's complete set of genes or proteins. They help in understanding disease mechanisms and identifying novel drug targets.

• Artificial Intelligence (AI) and Machine Learning (ML): AI and ML analyze large datasets, predict potential drug candidates, and optimize drug designs, significantly speeding up the drug discovery process.

• Biologics: Focus on developing drugs from living organisms, including monoclonal antibodies, offering new treatment modalities for various diseases.

So… what’s the issue?  

Well… it doesn’t really work. I mean, it does, but only sometimes. 

The success rate of drug discovery is surprisingly low. Historically, it's estimated that only about 1 in 5,000 to 10,000 compounds that enter preclinical testing make it to market. 

Furthermore, even among those that reach clinical trials, the probability of a drug candidate proceeding from Phase I to FDA approval is only about 9.6%. 

Not to mention, it’s incredibly time-consuming and pricey. With pre-clinical stages taking three to six, and costing hundreds of millions to over a billion dollars, trying to develop a drug is not an easy, nor quick feat. 

The emergence of AI-aided drug design is helping to smooth out some of these issues, but they remain. 

Here’s why: 

• Complexity of Biological Systems: Understanding the complex interactions within biological systems is a fundamental challenge. Diseases often involve multiple pathways and factors, making it difficult to identify targets for drug action.

• Predictive Models and Preclinical Testing Limitations: Preclinical models, such as animal testing, do not always accurately predict human responses. This can lead to failures in clinical trials when a drug does not perform as expected based on preclinical models.

• Ethical and Regulatory Issues: Ethical considerations, particularly in animal testing, and stringent regulatory requirements can pose hurdles. Compliance with these regulations is necessary but can add to the time and cost of drug development.

• Personalized Medicine and Genetic Variability: The rise of personalized medicine and the understanding that genetic variability can affect drug responses pose new challenges. This requires more customized approaches to drug development, which can be more complex and costly.

• Data Management and Integration: The vast amount of data generated from various stages of drug discovery (genomics, proteomics, clinical data) requires sophisticated tools for integration and analysis. Efficiently managing and leveraging this data is a challenge.

• Resistance and Emerging Diseases: In areas like antibiotics and antivirals, drug resistance is a growing problem. Furthermore, emerging diseases (like COVID-19) require rapid development of effective therapies, which current methodologies may not be well-equipped to handle promptly.

Especially when looking at cancer, these common issues cause some serious bottlenecks. 

Although new treatment modalities in oncology is growing at an ever-increasing clip, the lack of cancer-selective cell surface targets limits their application to just a few clinically effective cancer drugs. 

If you don’t have a target, you can’t figure out which drugs to apply to said target, and you have no drugs. 

At present, fewer than 30 molecular targets form the basis of all approved antibody-based cancer therapies. 

The Surfaceome, and Why it’s Important

The surfaceome refers to all the proteins present on the surface of a cell, specifically those that have at least one amino acid chain exposted to the extracellular space. 

For those of you who need a refresher, I’m not talking about whey or casein here. 

Proteins are among the most abundant organic molecules in living systems, coming in a variety of sizes, shapes, types, and functions, and are responsible for carrying out the vital cellular functions and processes we need to keep on kicking. 

As such, disruptions in protein function can have severe implications. Not only does dysfunction of certain proteins lead to abnormal cell growth (cancer), but some proteins have been identified to be associated with specific diseases. 

Studies of the surfaceome and the accessible proteins that inhabit it have contributed to the understanding of how cancer cells interact with their environment, how they evade the immune system, and how they spread. This research leads directly to understanding how to attack cancer cells without hurting the normal ones b identifying key, unique protein markers that are only prevalent in cancerous cells. 

DISCO Pharma

On January 16th, DISCO Pharmaceuticals emerged from stealth, successfully raising EUR 20M from Sofinnova Partners. 

They’ve built out a proprietary, first of its kind surfaceome mapping platform, enabling them to be cartographers of the cancer cell. 

The technology comprehensively maps the cell surface to identify new proteins and associated neighboring proteins in so called “protein communities”, which provides target candidates for both mono as well as bi-specific antibodies. 

DISCO is the first company to map the surfaceome of Small Cell Lung Cancer, a disease with poor surival and no approved targeting therapy. Their efforts have identified several novel proteins and protein communities that may be targets, and DISCO has launched the development of therapeutics to test their efficacy. 

DISCO Pharmaceuticals was established in May 2022 as a spin-off from ETH Zürich. Its founding team, comprising experts from ETH, the University of Cologne, and Stanford University, includes Prof. Roman Thomas, Dr. Johannes Heuckmann, Prof. Bernd Wollscheid, and Prof. Julien Sage. These founders bring extensive expertise in surface proteomics, cancer biology, and drug discovery. Dr. Stefan Ries, with prior leadership roles at Roche and as a venture partner at Versant Ventures, joins as the Chief Scientific Officer. The team is further strengthened by a globally recognized group of scientific advisors.

If that’s a whole lot of mumbo jumbo to you, let me frame it and put it within the perspective of current issues in drug discovery we spoke about earlier.

Why DISCO Matters, and Why I Chose Them 

We’ve established that successful drug discovery is incredibly challenging. Much of this, especially within the lens of cancer, can be attributed to not having enough viable target candidates to develop therapeutics for. DISCO directly addresses this issue, but tangentially addresses all of the other ones as well. 

Pretty cool stuff, right? Maybe we will see the cure to cancer in our lifetime after all…

See you next week. Let me know if you have any questions.