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Biotech startup NiKang raises $200M

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WILMINGTON – NiKang Therapeutics, a clinical stage biotech startup focused on small molecule cancer treatments, recently closed a $200 million Series C financing round, one of the largest such venture capital fundraisings in Delaware in recent memory.

The $200 million haul is a 300% increase over its Series B round that NiKang closed in September and is reportedly one of the largest fundraising rounds by any biotech firm in the greater Philadelphia region so far this year. It’s also more than three times as large as any round raised by Prelude Therapeutics, another startup based at the Delaware Innovation Space that went public last year and quickly became a billion-dollar company.

NiKang’s Series C round, which closed on May 26, was oversubscribed and led by Cormorant Asset Management, HBM Healthcare Investments and Octagon Capital Advisors. Other new investors included EcoR1 Capital, Perceptive Advisors, Wellington Management, Ally Bridge Group, Pavilion Capital, funds and accounts managed by BlackRock, RA Capital Management, Surveyor Capital (a Citadel company), Samsara BioCapital, PFM Health Sciences, Invus, Janus Henderson Investors and Logos Capital. All of NiKang’s previous investors, including CBC Group, RTW Investments, LP, Lilly Asia Ventures, Matrix Partners China, and Casdin Capital, also participated in the Series C round.

In connection with the financing, Bing Yao, former CEO and chairman of Viela Bio, and Ting Jia, founder and chief investment officer of Octagon Capital Advisors, will join NiKang’s board of directors.

“We are thrilled to have such an outstanding group of investors as our shareholders,” said Zhenhai Gao, co-founder, president and CEO of NiKang, in a statement announcing the funding. “Their support of our vision allows us to build the world’s leading precision oncology company. We are now well positioned to rapidly advance our pipeline into clinic including our differentiated HIF-2 alpha inhibitor, and to bring our company to the next level of growth.”

The enormous fundraising round comes less than two months after Kelsey Chen was hired as the startup’s chief finance officer. Chen was previously a managing director for private and public biotech investment at Cormorant Asset Management, one of the round’s top investors.

“This financing is a testament to the quality of our science and team,” Chen said in a statement. “Since joining NiKang, I have witnessed the passion and dedication of a group of talented scientists who are devoting their lives to advancing treatments for patients. We are grateful to be recognized by such a high caliber group of investors.”

Proceeds will be used to advance NiKang’s lead drug candidates into the clinic, expand the pipeline and fund internal drug discovery programs.

The company was incubated in 2017 with $10 million of seed funding by CBC Group, a Chinese health care investment firm formerly known as C-Bridge Capital. Notably, NiKang is currently led by Gao, who spent years working on Incyte Corporation’s cancer research.

Like Prelude Therapeutics, another Delaware-based biotech startup that has ties to Inctye, NiKang is researching small molecule inhibitors, a developing therapy that is more targeted in approach with fewer side effects than traditional cancer therapies like chemotherapy or radiation.

In January, NiKang signed a worldwide licensing agreement with San Diego-based firm Erasca for an SHP2 inhibitor it is developing. That drug is now in Phase I trials in the U.S. and Australia under Erasca.

“If ERAS-601 successfully blocks SHP2 activity in patients, it has the potential to become a flagship therapy for many patients with various solid tumors,” said Dr. Jonathan Lim, Erasca’s chairman, CEO and co-founder, in a statement announcing the deal.

Last year, NiKang also signed a deal with Chinese biopharmaceutical company Hansoh Pharma to develop its preclinical small molecule drug NKT-1992 to treat viral infections in China. In announcing that deal, which could be worth up to $100 million if fully developed with added tiered royalties if commercialized, Hansoh officials called NiKang a company that “has demonstrated impressive capabilities in drug discovery.”

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