Cabaletta Bio Secures $50 Million Series B Financing to Advance CAAR-T Therapies for Autoimmune Diseases

Recently, VCBeat (WeChat ID: vcbeat) learned that biotechnology company Cabaletta Bio has completed a $50 million Series B financing round. New investors in this round include Deerfield Capital Management, Boxer Capital (under the Tavistock Group), Redmile Group, and Cormorant Capital. Existing investors include Adage Capital Management, 5AM Ventures, and an unnamed publicly traded healthcare investor.

Cabaletta Bio is a biotechnology company headquartered in Pennsylvania, focused on the discovery and development of T-cell therapies for B cell-mediated autoimmune diseases.

Cabaletta Bio is developing a therapy known as chimeric autoantibody receptor T cells, also referred to as CAAR-T therapy. This approach is similar to chimeric antigen receptor T cell (CAR-T) therapy, except that CAAR-T therapy is primarily used for autoimmune diseases rather than cancer.

The goal of CAAR-T therapy is to selectively eliminate B cells expressing the DSG3 protein. Compared with its application in hematologic oncology, the use of adoptive T-cell therapy in autoimmune diseases remains to be explored. A search on ClinicalTrials.gov for studies on CAR-T therapy in autoimmune diseases yielded two investigational products, both originating from China: one sponsored by Shanghai GeneChem for the treatment of systemic lupus erythematosus, which has not been updated in nearly a year and merely mentions that CAR-T cells can be used for multiple sclerosis without providing further details; the other is an investigational drug for the treatment of AQP4-IgG–seropositive neuromyelitis optica spectrum disorders, sponsored by the Chinese People’s Liberation Army General Hospital.

Cabaletta Bio’s CAAR-Ts are structurally similar to certain CAR-Ts, particularly Kymriah and Celgene’s JCAR017. In a sense, they employ the 4-1BB co-stimulatory domain to enhance cytokine production and use the CD3-zeta signaling domain to mediate downstream signaling during T-cell activation. Another FDA-approved CAR-T is Gilead Sciences’ Yescarta, which utilizes a different co-stimulatory domain known as CD28.

Cabaletta Bio stated that the proceeds from its Series B financing will support the establishment of translational research capabilities—translating basic scientific discoveries from the laboratory setting into potential disease treatments—and advanced manufacturing capabilities, thereby complementing Cabaletta Bio’s collaboration with the Center for Cellular Immunotherapies at the University of Pennsylvania’s Abramson Cancer Center. These translational research and advanced manufacturing capabilities will enable the company to accelerate the development of its product pipeline while advancing its lead product candidate, DSG3-CAART, into clinical development.

“Following the completion of our $50 million Series B financing, we have raised a total of $88 million since May 2018,” said Steven Nichtberger, Founder, CEO, and Chairman of Cabaletta Bio. “This capital is sufficient to support the achievement of our 2021 objectives, including: submitting an Investigational New Drug (IND) application for DSG3-CAART in the second half of 2019 and, upon FDA approval, initiating our first clinical trial in patients with pemphigus vulgaris; accelerating the development of our translational research and advanced manufacturing capabilities under the leadership of Dr. Gwendolyn Binder; and expanding the business foundation of our already strong core investor base.”

During the Series B financing round, the University of Pennsylvania, a seed investor in Cabaletta Bio, sold a portion of its preferred shares to new investors, thereby broadening participation in Cabaletta Bio’s Series B round. The collaboration between Cabaletta Bio and the University of Pennsylvania continues to expand and strengthen; over the past few months, the two parties have also negotiated and executed additional agreements covering manufacturing and research services.

Deerfield Capital Management (DCM) is an investment advisory firm headquartered in Illinois. Established in 1993, it primarily manages collateralized debt obligations (CDOs) and hedge funds.

The company primarily invests in government securities, investment-grade bonds, asset-backed securities, and bank loan portfolios, with assets under management exceeding $8 billion.

Tavistock Group is an international private investment institution headquartered in the Commonwealth of The Bahamas, with offices and significant business operations in North America, South America, Eastern Europe, Western Europe, and the Caribbean.

The Tavistock Group comprises a family office, trading operations, and a portfolio of public and private company investments concentrated in nine key sectors: real estate, hospitality, restaurants, sports, energy, retail, biotechnology and life sciences, agriculture, and finance.

Tavistock Group boasts a massive asset scale, with over 200 companies across 10 countries, and frequently engages in sustained long-term investments.

Redmile Group is a healthcare investment firm founded in 2007 and headquartered in California, United States. The company primarily engages in venture capital, growth equity, and cross-border investments within the healthcare sector.

Cormorant Capital operates two core businesses: consulting and investment. In its consulting practice, Cormorant Capital brings extensive experience in procurement and capital deployment; in its investment arm, Cormorant Capital provides funding in partnership with real estate operators.

Public records show that since September 2017, Cormorant Capital has made three investments, with the most recent being its participation in Cabaletta Bio’s Series B financing round.

Adage Capital Management is a Boston-based asset management firm with $890 million in assets under management. The fund is managed by Phill Gross, who served as a healthcare and retail analyst at Harvard Management Company before founding Adage.

Adage Capital Management specializes in managing S&P 500 assets, primarily for institutions such as Harvard University, Northwestern University, Dartmouth College, the American Red Cross, and the Getty Foundation. Over the past 15 years, Adage and its predecessor, Harvard Management Company’s Select Equity Group, have outperformed the S&P Index by an average of 3.5%.

5AM Ventures is a venture capital firm headquartered in California, founded by John Diekman and Andrew Schwab in 2002.

5AM Ventures’ portfolio includes companies in the biopharmaceutical, life sciences, medical technology, and research instrumentation sectors, with the firm aiming to provide funding for such companies during their seed and early-stage development.