Galecto Biotech, a Denmark-based cancer and fibrosis treatment developer backed by pharmaceutical firms Bristol Myers-Squibb (BMS), Novo and Merck Group, disclosed on Tuesday that it will merge with US-based peer PharmAkea.
Financial terms of the transaction have not been disclosed. The joint entity will operate under the Galecto name and will be led by the latter’s existing senior management team, including chief executive Hans Schambye.
Galecto will be incorporated in the US, with an office located on the East Coast, while retaining its operating headquarters in Denmark. PharmAkea will shut down its San Diego office and employees will move to the new head office on the other side of the country.
Founded in 2011, Galecto has built a pipeline of drugs targeting galectins, a group of proteins involved in diseases such as fibrosis, cancer and inflammation. It is advancing research originally conducted at Lund University and University of Edinburgh.
PharmAkea was founded the following year with an undisclosed amount of seed funding by pharmaceutical firm Celgene and is similarly working on therapies for fibroproliferative diseases.
The merged business will have access to a Galecto-developed product candidate for idiopathic pulmonary fibrosis, a condition primarily affecting people aged 70 or older and characterised by scarring of the lungs and a resulting shortness of breath, that is in phase 2b clinical trials.
The Galecto candidate will be complemented by the PharmAkea-developed, phase 2-ready PAT-1251, which is intended to prevent the deposition and accumulation of collagen which can cause tissue scarring.
Carl Goldfischer, managing director of Bay City Capital, will join Galecto’s board of directors following completion of the merger. Bay City supplied $10m in series A funding for PharmAkea in 2013, when Celgene committed $35m in equity funding and upfront payment as part of a collaboration agreement.
Galecto most recently closed a $90m series C round featuring BMS, Novo and Merck Group in late 2018, Novo and Merck taking part through corporate venturing subsidiaries Novo Seeds and M Ventures.
The series C round was co-led by Ysios Capital and OrbiMed, with additional participation from HBM Healthcare Investments, Maverick Ventures, Seventure Partners, Sunstone Capital and OrbiMed Israel.
Novo Seeds and M Ventures – at the time known as Merck Serono Ventures – contributed to a $4m round for Galecto in 2013 together with Seed Capital and Sunstone Capital, after the same consortium had provided an undisclosed amount of seed funding in 2012.Its shareholders also include commercialisation firm Forskarpatent i Syd, which helped establish the company.
