Frequency Therapeutics Secures $62 Million Series C Financing to Advance FX-322, a Small Molecule Therapy for Hearing Loss

On July 24, 2019, VCBeat (WeChat ID: vcbeat) learned that Frequency Therapeutics (“Frequency”) had completed a $62 million financing round. The round was led by Perceptive Advisors, with participation from Deerfield Management and other investors. Some existing investors, including Axil Capital, also participated in this Series C financing. To date, Frequency’s total fundraising has reached $147 million.

The funds raised in this round will be used by Frequency to develop FX-322, a cutting-edge drug for the treatment of hearing impairment, through its Progenitor Cell Activation (PCA) platform. Frequency is a clinical-stage biotechnology company focused on leveraging the body’s innate biological mechanisms to repair or reverse damage caused by a range of degenerative diseases. The company’s lead candidate, FX-322, is a potential first-in-class therapeutic aimed at hearing restoration and is currently undergoing Phase 2a clinical trials.

Frequency has pioneered a novel small-molecule therapy designed to activate endogenous progenitor cells to generate healthy, functional tissues and organs. This approach circumvents the challenges associated with stem cell therapies by temporarily activating progenitor cells already situated at the target tissue site and preprogramming them to differentiate into specific cell types. Potential applications of Frequency’s PCA platform include disorders affecting the gastrointestinal tract, skin, and bone. Previously, the company’s therapy for regenerating sensory cells in the inner ear alone impacted over 30 million people in the United States.

Frequency Therapeutics recently announced a collaboration agreement with Astellas Pharma for the global development of FX-322, which includes an $80 million upfront payment and up to $545 million in sales-based milestones.

“This financing comes at a pivotal moment for Frequency, as we prepare to advance our lead clinical candidate, FX-322, into a Phase 2a study for sensorineural hearing loss, a condition that currently has no approved treatments,” said David Lucchino, President and Chief Executive Officer of Frequency. “With the support of such significant investors, we are confident that FX-322 will successfully complete clinical development and bring new therapies to patients with hearing loss.”

“We focus on partnering with life sciences companies that are applying revolutionary approaches to develop drugs in disease areas with insufficient current treatment options,” said Joseph Edelman, CEO of Perceptive Advisors. “We greatly appreciate Frequency’s organizational capabilities; the company has an efficient team innovating therapies for hearing loss and expanding into other areas with significant unmet patient needs.”

“We are striving to leverage innate biology to develop localized therapies, thereby reducing the complexity of regenerative medicine,” said Marc Cohen, Executive Chairman of Frequency. “We are excited about the potential of our company’s PCA platform to produce novel drugs and are pleased with the continued support from both new and existing investors as we advance transformative therapies for patients.”

Perceptive Advisors is a private hedge fund sponsor headquartered in New York, USA. The firm invests in global public equity markets, primarily employing long/short equity strategies as hedging techniques while making investments. Perceptive Advisors typically invests in the biotechnology and life sciences sectors.

Deerfield Management is a venture capital firm that specializes in seed-stage financing and invests in early- and late-stage startups. The company focuses on investments in the healthcare, pharmaceutical, and biotechnology sectors. Headquartered in New York, Deerfield Management has offices in Shanghai, China, and Epalinges, Switzerland.

Axis Capital is a leading financial institution in India, specializing in investments within the banking and institutional equity sectors. As a wholly-owned subsidiary of Axis Bank, one of India’s largest private sector banks, it provides professional and tailored solutions to its clients. Axis Capital addresses the financial needs of investors, corporations, and governments across areas including equity capital markets, mergers and acquisitions, private equity, structured finance, and equities.

(Compiled by: Fan Xin)