Aiolos Bio Secures $245 Million Series A Financing to Advance Lead Asset AIO-001, a Long-Acting TSLP Antibody Licensed from Hengrui Medicine

On October 24, Aiolos Bio announced the completion of a $245 million Series A financing round, led by Atlas Venture, Bain Capital Life Sciences, Forbion, and Sofinnova Investments, with participation from RA Capital Management.

Aiolos Bio is dedicated to developing novel therapeutics for respiratory and immune system diseases. This financing round stands as one of the largest Series A fundraisings for a biotechnology company in 2023. The proceeds will be used to advance its core pipeline candidate, AIO-001, a novel TSLP antibody, into Phase II clinical trials for the treatment of asthma. This asset was licensed from China’s Hengrui Medicine.

In August this year, Hengrui Medicine announced that it had reached an agreement with U.S.-based One Bio to exclusively license the rights for the global development, manufacturing, and commercialization of SHR-1905, excluding the Greater China region, to One Bio. Hengrui Medicine will receive a $25 million upfront and near-term milestone payment, up to $1.025 billion in R&D and sales milestone payments, as well as tiered royalties on net sales.

One Bio was formerly known as Aiolos Bio, and SHR-1905 is now AIO-001.

The establishment of Aiolos Bio is closely related to Hengrui’s SHR-1905.

In January 2022, Aiolos Bio founders Tony Adamis and Khurem Farooq planned to establish a biotech company, starting by compiling a list of immunology targets that interested them most. In their search for drug candidates, the two ultimately identified Hengrui’s SHR-1905.

SHR-1905 is a monoclonal antibody targeting thymic stromal lymphopoietin (TSLP). TSLP inhibition has a well-established role in alleviating the symptoms of severe asthma. It blocks the release of inflammatory cytokines, inhibits the transmission of downstream inflammatory signals, and ultimately improves the inflammatory state and controls disease progression.

There are two main reasons why SHR-1905 has garnered interest from Aiolos Bio:

First,SHR-1905 allows for once-every-six-months dosing., whereas the only previously approved anti-TSLP drug was Tezspire, developed by Amgen and AstraZeneca, which requires monthly injections. If SHR-1905 gains approval, it will offer a significant advantage over Tezspire in terms of drug accessibility. The innovation of this drug has also been recognized by Aiolos Bio. “Chinese biotechnology companies are on the rise; they have already begun developing truly innovative molecules,” said Tony Adamis.

Meanwhile, prior to entering into the collaboration agreement with Aiolos Bio, Hengrui had already incurred cumulative R&D expenses of approximately RMB 57.05 million on the SHR-1905 program. The drug is currently undergoing two clinical trials in China, both at Phase II. The clinical trial for asthma was approved to commence in May 2021, while the clinical trial for the indication of chronic rhinosinusitis with nasal polyps was approved to commence in May 2023.

Prior to this,Hengrui has conducted Phase I trials in over 100 patients in China and New Zealand., most of whom were healthy volunteers.Tony Adamis stated that data to date indicate the molecule is highly effective, “which truly leads us to conclude that SHR-1905 may be the best-in-class molecule.”

As a result, Aiolos Bio acquired SHR-1905 and renamed it AIO-001, which became the company’s sole product pipeline.

Despite the ongoing downturn in the biopharmaceutical industry, the number of startups raising $100 million or more in early-stage funding rounds continues to surge. However, while other companies have secured substantial capital to develop new therapeutic modalities and a broad pipeline of drug candidates, Aiolos Bio has only one product in development to date. This raises the question: why has Aiolos Bio been able to raise such a significant amount of capital?

Aiolos Bio CEO Farooq stated that early-stage data have confirmed the efficacy of AIO-001, which will help the company prepare for Phase II clinical trials in patients with moderate-to-severe asthma.

This is related to the current financing model of biotech companies.Today, capital is more focused on whether a product can successfully enter clinical trials and obtain effective data to confirm the efficacy of drugs, rather than concentrating on exciting but unproven scientific areas.Therefore, even with a single asset, Aiolos has still gained market recognition. This strategy can even facilitate the public listings of other biotechnology companies; for instance, Mineralys, a cardiorenal disease biopharmaceutical company, and Abivax, an innovative gastrointestinal therapeutics enterprise, both completed their U.S. IPOs relying on a single pipeline.

Of course, the clinical trial design and late-stage development of the pipeline require support from a talented team. Aiolos Bio boasts an experienced founding team, most of whom have accumulated extensive drug R&D expertise at Genentech, a member of the Roche Group.

Co-founder and CEO Khurem Farooq is a seasoned biopharmaceutical executive with over 25 years of leadership experience in drug development and operations. Prior to joining Aiolos Bio, he served as CEO of the gene therapy company Gyrograph Therapeutics, which was successfully acquired by Novartis for $1.5 billion in 2021. Additionally, he previously held the position of Senior Vice President and Head of the Immunology and Ophthalmology Business Unit at Genentech.

Another co-founder, Tony Adamis, is a member of the U.S. National Academy of Medicine and is renowned for co-discovering the central role of VEGF in ocular diseases. He previously co-founded Eyetech with David Guyer, M.D., a company that developed the first FDA-approved anti-VEGF therapy for ophthalmic indications. Throughout his career at Genentech and other companies, Tony led teams in developing 20 drug candidates across 30 indications, conducting global clinical trials involving more than 25,000 patients, with seven programs receiving FDA Breakthrough Therapy designation.

Chief Technology Officer Ashley Taylor has 32 years of experience in the biotechnology industry, having overseen various capabilities for early clinical production, product launch, and commercial manufacturing of more than 50 clinical drug candidates and 20 commercial products. Prior to joining Aiolos Bio, Ashley spent 20 years at Genentech, holding various roles related to operations and CMC.

Although AIO-001 demonstrates strong competitiveness in the treatment of asthma, this therapeutic area is crowded with numerous competitors.In addition to the already marketed Tezspire, there is Sanofi’s SAR443765, a bispecific nanobody targeting TSLP and IL-13, which is expected to enter Phase IIb clinical trials by the end of 2023; Upstream Bio’s UPB-101 is currently in Phase Ib trials; and the anti-TSLP program from AI-driven drug discovery startup Generate Biomedicines plans to submit an Investigational New Drug (IND) application to the FDA in the fourth quarter of 2023.

Aiolos is ambitious in its clinical design for AIO-001. Although the company has not yet set trial parameters, Adamis pointed out that Amgen enrolled approximately 550 participants in the Phase II study of Tezspire and more than 1,000 in the Phase III clinical trial. Therefore, Aiolos will expand the scale of its clinical trials.

Meanwhile, there are signs that TSLP inhibitors could be used to treat other inflammatory diseases. Aiolos Bio mentioned that the company is conducting research on using AIO-001 for the treatment of chronic obstructive pulmonary disease (COPD) and chronic spontaneous urticaria (CSU).

In addition to continuing to expand the indications for AIO-001, Farooq does not expect AIO-001 to remain the company’s sole asset indefinitely; more new projects will be developed in the future to support the company’s next stage of growth.