U.S. Markets closed

Foreign Firms Recognized as Hottest Biotechs

In a Sept. 23 article, GuruFocus highlighted three of the 15 private and independent biotechs recognized by a key industry publication for their innovation. As suggested in the piece, investors may want to keep an eye on these firms, many of which could eventually go public. They could also come under the wing of an established member of pharma, bringing the acquirer a novel platform or helping it move into growing areas of therapy. Both could substantially boost the valuation of the parent.

For the first time in 2019, FierceBiotech considered foreign firms for recognition. One that made the list is Belgium-based Confo Therapeutics, which is working on treatments for fibrotic, metabolic and neurological diseases.

Confo's approach is similar to the one employed by another Belgian biotech, Ablymx, which was acquired last year by Sanofi (SNY) for $4.8 billion, topping a bid by Novo Nordisk (NVO).

Confo's leadership is one reason the company is "fierce." Toon Laeremans, who helped launch Ablynx, oversees Confo technology. He is joined at the top by another Ablynx veteran, Cedric Ververken, Ph.D. The leadership group is rounded out by the former director of medicinal chemistry at Galapagos (GLPG), Christel Menet, Ph.D.

Confo is using the proceeds of a $33 million series-A round to advance three priority drug programs. The company's investors are BioGeneration Ventures, Wellington Partners, Fund+, Perceptive Advisors, Capricorn Venture Partners, MINTS, PMV, Qbic, V-Bio Ventures and VIB.

Another company that made the list is Dewpoint, which operates out of both Cambridge, Massachusetts, and Dresden, Germany. The company's focus is condensates, a new area of research that is helping to explain aspects of cell biology that have been mysterious to scientists, according to the FierceBiotech article.

Condensates are key to drug discovery because mutations that seem to influence their structures appear to affect the course of neurodegenerative diseases, cancer and more. Greater understanding of them could lead to treating a number of diseases.

Dewpoint's chief scientific officer, Mark Murcko, Ph.D., said that given the complexity of the company's technology -- and its potential -- Dewpoint is developing relationships with a diverse and leading group of advisors

"What we're saying is that this is such a first-inning opportunity, that in addition to building a top exec and research team internally, we want to be totally open to the fact the field is exploding," he told Fierce Biotech. "And so we're building very deep relationships with a huge cross-section of the leaders in the field."

The company is funded by a $60 million series-A round led by Polaris Partners and includes Samsara BioCapital, 6 Dimensions Capital, EcoR1 Capital and Leaps by Bayer (XTER:BAYN).

South San Francisco-based Frontier Medical also made the list. Its backers are Deerfield Management, Droia Oncology Ventures, MPM Capital, DVCV Bio and RA Capital Management.

The company hopes to develop at least three internal clinical programs, starting in cancer.

CEO Chris Varma, Ph.D., previously helped establish Blueprint Medicines, which made the Fierce 15 in 2011, and Warp Drive bio. Varma hopes the Frontier technology will allow it to advance quickly through the hit-to-lead stage of drug development.

In June, Frontier received $67 million in a series A-round. Backers include Deerfield Management, Droia Oncology Ventures and Varma's previous employer, MPM Capital. The company will use the funds to develop its pipeline and build staff, which grew by 50% this summer.

One of Frontier's key hires was Kevin Webster, Ph.D., who joined the company as chief scientific officer. He came to Frontier from AstraZeneca (AZN), where he was vice president of oncology research. Also coming on board as chief technology officer was Johannes Hermann, Ph.D., who came to the company from Johnson & Johnson (JNJ), where he was the global head for data science, medical device technology.

Disclosure: The author holds a position in Johnson & Johnson.

Read more here:

Investors May Want to Follow the Progress of These Biotechs

Gilead, AbbVie Are Innovative, but May Be Underappreciated

Establishment Labs Poised to Capitalize on Allergan Breast Implant Issues

Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.

This article first appeared on GuruFocus.