Clinical-stage Houston cell therapy company closes $28.4M oversubscribed series A

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March Biosciences' oversubscribed raise brought in $28.4 million of financing with Mission BioCapital and 4BIO Capital leading the pack of investors. Photo via Getty Images

An emerging biotech company in Houston has closed its series A with outsized success.

March Biosciences' oversubscribed raise brought in $28.4 million of financing with Mission BioCapital and 4BIO Capital leading the pack of investors. The company has now raised more than $51 million in total.

Last year, March Biosciences announced its strategic alliance with CTMC (Cell Therapy Manufacturing Center), a joint venture between MD Anderson Cancer Center and National Resilience. CEO Sarah Hein met her co-founder, Max Mamonkin, at the TMC Accelerator for Cancer Therapeutics. Along with fellow co-founder Malcolm Brenner, March Biosciences launched from the Center for Cell and Gene Therapy (Baylor College of Medicine, Houston Methodist Hospital and Texas Children’s Hospital). Its goal is to fight cancers that have been unresponsive to existing immunotherapies using its lead asset, MB-105.

An autologous CD5-targeted CAR-T cell therapy, MB-105 is currently in phase-1 trials in patients with refractory T-cell lymphoma and leukemia. The treatment is showing signs of being both safe and effective, meriting a phase-2 trial that will begin early next year. The funds raised from the series A will help to finance the Phase 2 clinical development of MB-105 to expand on the existing data with optimized manufacturing processes.

“This oversubscribed financing enables us to advance our first-in-class CAR-T therapy, MB-105, into a Phase 2 trial for T-cell lymphoma – an indication with an exceptionally poor prognosis and few treatment options,” says Hein. “With the support and confidence of our investors, we are not only advancing our lead program but also expanding our pipeline, underscoring our commitment to delivering best-in-class therapies to patients that can change the treatment paradigm for these challenging cancers.”

But that’s not the only exciting news that Hein and her associates have to report. March Biosciences has recently partnered with cell therapy venture studio, Volnay Therapeutics. Led by highly experienced cell therapy development veterans, the March Biosciences team will work to develop a scalable manufacturing process for MB-105 that will lead to commercialization. Volnay co-founder and CEO Stefan Wildt, who held key R&D leadership positions in cell and gene therapy units at Novartis and Takeda, has also joined the board of March Biosciences. The board of directors is also welcoming Cassidy Blundell of Mission BioCapital and Owen Smith of 4BIO Capital.

“The team at March Biosciences is leveraging powerful science and promising clinical data to tackle cancers with significant unmet need,” says Blundell, a partner at Mission BioCapital. “We're excited to support their journey and believe their focused approach with MB-105 could lead to significant breakthroughs in the CAR-T space.”

The Houston-born company, which is a finalist for the 2024 Houston Innovation Awards, continues to accelerate quickly, in part thanks to its home base. After all, existing local investors like TMC Venture Fund also participated in the new raise. As Hein said last year, “Working with partners here in Houston, we have all the pieces and the community rises to the occasion to support you.”

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Diakonos Oncology Corp. closed its seed round to the tune of $11.4 million. Photo via Getty Images

Houston oncology therapeutics co. raises $11.4M in seed funding

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A Houston-based, clinical-stage immuno-oncology company has raised an oversubscribed round of seed funding.

Diakonos Oncology Corp. closed its seed round to the tune of $11.4 million. The funding will go toward supporting the company's Phase 2 trial — slated for later this year, following its ongoing Phase 1 study — and operations through late next year. California-based biotechnology investment firm Restem Group Inc. led the round, and existing investors contributed as well.

“We greatly appreciate the support of these investors in sharing our passion for improving the lives of patients suffering from deadly cancers such as glioblastoma,” Mike Wicks, Diakonos CEO, says in a news release. “The fact that this financing is nearly triple our initial target also shows they share our confidence in the effectiveness of our unique cancer therapy.”

Founded in 2016, the company recently received FDA Fast Track designation for its dendritic cell vaccine, DOC1021, which targets glioblastoma multiforme, or GBM, the most common and most lethal malignant brain tumor in adults. Diakonos also received the designation for its pancreatic cancer treatment.

"We are thrilled to invest in this groundbreaking company that is at the forefront of cancer treatment innovation. As a firm deeply involved in the cell therapeutic field, we recognize the immense potential of their pioneering work with dendritic cell therapies and we are confident that this can become a new standard of care for cancer in the future," adds Andres Isaias, executive chairman of Restem Group Inc.

Diakonos Oncology's DOC1021 uses the body’s natural anti-viral immune response to fight GBM. The vaccine mimics viral infection with the patient’s cancer markers. Essentially, DOC1021 uses the body’s own natural ability to detect and eliminate infected cells. According to the company, all of the patients who have tried the treatment have exceeded survival expectations. And DOC1021 appears to be extremely safe, with no serious adverse effects having been reported.

A Houston company with a promising immuno-oncology is one step closer to delivering its cancer-fighting drug to patients who need it. Photo via Getty Images

Houston immuno-oncology company reaches next FDA milestone, heads to phase 2 trial

green light

A Houston immuno-oncology company has recently made major headway with the FDA, including both a fast track and an orphan drug designation. It will soon start a phase 2 trial of its promising cancer fighting innovation.

Diakonos Oncology was born in 2016, the brainchild of Baylor researchers already hard at work in the realm of dendritic cell vaccines. Drs. Will Decker, Matt Halpert, and Vanaja Konduri partnered with Dan Faust, a Houston businessman and pharmacist, to bring their treatment to the public, says COO Jay Hartenbach.

The name Diakonos means “deacon or servant in Greek,” he explains. “A lot of companies end up focusing on treating a specific disease or cancer and what you end up having is a significant amount of potential but with a lot of tradeoffs and downsides. And so our goal is we need to eliminate the cancer but we can't harm or dramatically malign the patient in doing so.”

How do they do that? Because the therapy catalyzes a natural immune response, it’s the patient’s own body that’s fighting the cancer. Hartenbach credits Decker with the idea of educating dendritic cells to attack cancer, in this case, glioblastoma multiforme (GBM), one of the most aggressive cancers with which doctors and patients are forced to tangle.

“Our bodies are already very good at responding very quickly and aggressively to what it perceives as virally infected cells. And so what Dr. Decker did was basically trick the immune system by infecting these dendritic cells with the cancer specific protein and mRNA,” details Hartenbach.

Jay Hartenbach is the COO of Diakonos Oncology. Photo courtesy of Diakonos Oncology

But GBM isn’t the only cancer on which Diakonos Oncology has its sights set. Other notably stubborn-to-treat cancers that they’re working on include pancreatic cancer and angiosarcoma. The scientists are focused on meeting unmet medical needs, but also realize that treating such cancers would allow for the fastest determination of whether or not the treatment was effective.

The fast track designation, originally received last fall, means that the drug approval time for DOC1021, Diakonos’ glioblastoma vaccine, will be only six months. But Hartenbach highlights an additional boon, the fact that the special designation also allows for more frequent communications with the FDA.

“That’s very helpful for us, right as we're contemplating how to design the upcoming trials. From a business standpoint, it also is incredibly helpful because it provides a third party validation of what we're doing and the results that we're seeing,” he says.

What they’re seeing includes the survival of 13 out of 16 patients from the initial October 2021 enrollment. The three patients who passed away received the lowest dose of DOC1021. Hartenbach says that the remaining patients are thriving, with no serious adverse effects. With a median survival rate of 15 to 21 months, it’s hard to understate the significance of these patients’ success.

Diakonos Oncology is headquartered in Houston, with a staff of 10 in Space City and an additional eight distributed employees. Hartenbach says that the company’s hometown has been instrumental in its success. He mentions that the robust innovation of the Texas Medical Center meant that as the company has grown, there has never been a motivation to leave Houston.

“You're having a lot of both investment and companies actually moving to Houston,” Hartenbach says. “So we’ve been fortunate to have started there. There are bigger traditional biotech hubs, San Diego, Boston, and San Francisco, but Houston really is now putting itself on the map and it's getting a lot of attention.”

One of the companies responsible for that improved reputation? Diakonos Oncology and its promising approach to aggressive cancers.

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Houston lab explores how AI bots can help the elderly

AI for aging

The University of Houston’s Empathetic Lifespan AI & Robotics for Aging (ELARA) Lab is currently conducting research into how AI bots may be able to help the elderly live more social and independent lives through several ongoing initiatives.

The lab officially launched last month as part of the Gerald D. Hines College of Architecture & Design under the leadership of Assistant Professor Chorong Park. Part of the lab’s mission is tackling ongoing problems with aging, such as dealing with disabilities and social isolation. Researchers’ current work is focused on designing a new AI companion bot specifically tailored to the needs of older people.

“We need to take all the needs of older adults seriously,” Park said in a news release. “They won't use the robot if they don't feel at ease or if they feel they are being constantly watched.”

The field testing of new AI bots in this population hopes to overcome several traditional obstacles in technology use among the elderly. A study by Park shows that many older people have a fear of overt surveillance when using advanced AI. There is also ageism to consider. Most new technologies are designed with younger and employed buyers in mind, not retirees who may need help remembering daily tasks or accessing important information.

“The more older adults are excluded from technology development, the worse those technology gaps will become,” Park said. “AI and the majority of technologies are created for younger people, so my research method integrates older adults directly into the design process.”

ELARA recently collaborated with the Mamie George Community Center in Richmond, Texas, to track seniors’ response to desktop AI bots like Emo and Cupboo. Researchers also had participants use air-dry modeling clay to create their ideal robotic companion.

While the eventual AI bot may be able to help the elderly feel less isolated and more supported, there are concerns to consider. A study published in the Asian Journal of Psychology charted the development of delusional thinking in a 72-year-old woman who became convinced the empathic-response bot was in love with her. The rise of “AI psychosis” has the potential to exacerbate mental health problems, particularly in socially isolated people, which a quarter of Americans over the age of 65 are.

ELARA’s research is focused on creating “pet-like” AI models with enhanced trust cues. If it can overcome the dangers of socially isolated people relying on AI for companionship, it could be a big step forward for independent aging.

SpaceX IPO set to be biggest ever and could make Elon Musk a trillionaire

IPO News

SpaceX says it plans to raise up to $75 billion when it goes public this month, setting the stage for the largest-ever stock market debut and putting Elon Musk on course to becoming the world's first trillionaire.

The company, formally known as Space Exploration Technologies Corp., said Wednesday it will sell 555.6 million shares at $135 a piece in an initial public offering. The estimated proceeds would easily top the $26 billion raised by oil giant Saudi Aramco in 2019. The offering would also give SpaceX a market value of $1.77 trillion. Only six companies in the S&P 500 are currently worth more, with Nvidia tops at $5.2 trillion.

Besides the size of the offering and the expected proceeds, SpaceX's amended prospectus updates details about how much control of the company Musk will have. As SpaceX's CEO, chief technical officer and chairman, Musk's voting power will come primarily through his ownership of 5.22 billion Class B shares, which give the holder 10 votes for every share held. According to the filing, Musk would have 82.4% of the voting power in the company.

Forbes currently values Musk's net worth at $826 billion and his stake in SpaceX at $542 billion. The estimated value of his SpaceX holdings was based on an overall value for the company of $1.25 trillion. Based on those numbers, a $1.77 trillion valuation for SpaceX would boost Musk's net worth by $223 billion, making him a trillionaire. However, much of Musk's worth is in stock that he has yet to cash in.

Even as it makes a bid for a blockbuster market debut, SpaceX is currently losing billions of dollars a year. The filing shows that the company lost $2.6 billion from operations last year on $18.7 billion in revenue, and the losses kept piling up at the start of this year, too.

Fantastical plans

Time will tell how SpaceX fares on the market. Musk's plans for the company are as fantastical as the money he hopes raise in the sale.

Colorful, even frightening in parts, the IPO document strikes a contrast with the typically dry, technical prose in IPO documents, detailing plans to use proceeds from the sale to help put men on the moon again and perhaps even Mars. In one section, it talks of a need to build "a permanent human colony" on the red planet with "at least one million inhabitants" as existential threats loom that could consign man to "the same fate as the dinosaurs."

Musk has almost equally ambitious plans for his other publicly traded company, Tesla. His goal is to transform the maker of electric vehicles into a producer of robotaxis and humanoid robots. Dan Ives of Wedbush Securities wrote in a research note that he expects Tesla and SpaceX to merge next year.

AI plays a key role

Key to the success of both companies — and any merged entity — is artificial intelligence. In its IPO filing, SpaceX says it sees potential revenue from AI of up to $26.5 trillion. But that depends on another lofty Musk ambition — putting data centers in space, which is not technologically possible at the moment.

Transforming his space company into a primarily AI-focused company will be a challenge for Musk, who started xAI in 2023 with 11 other co-founders who have all since left. Some were recruited away by rivals.

Its main AI product, the chatbot Grok, is "less impressive than anything that we see from any other major player in the space, whether that's OpenAI, or Anthropic, or (Google's) Gemini," said IDC analyst Arnal Dayaratna.

Dayaratna said that doesn't mean SpaceX doesn't have potential as a major AI player, thanks in part to its computing partnership with Anthropic and Musk's recent deal that gave SpaceX the rights to buy AI coding tool Cursor for $60 billion later this year. Folding in Cursor's capabilities would give SpaceX access to the coveted business customers now using Anthropic's Claude or OpenAI's ChatGPT.

SpaceX plans to use the net proceeds from the IPO to fund the expansion of infrastructure for its AI and rocket businesses, and to beef up the constellation of satellites that power Starlink Mobile, among other investments.

The company plans to list on the Nasdaq under the symbol "SPCX" and could begin trading as soon as the end of next week.

And SpaceX isn't the only colossal market debut investors are now bracing for. Earlier this week, Anthropic submitted a confidential filing with the U.S. Securities and Exchange Commission to officially start its own IPO clock.

OpenAI has not yet reported filing the initial SEC paperwork, but an IPO from the ChatGPT maker is widely expected.

"This listing represents the first major test for public markets after years of muted IPO activity with SpaceX paving the way for AI giants Anthropic and OpenAI to follow soon after," Ives wrote.

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Associated Press Technology Writer Matt O'Brien contributed.

New UH survey reveals concerns over AI data center growth in Houston

data findings

A new report out of the University of Houston shows that area residents remain wary of the long-term effects of operating data centers.

The recent survey from the University of Houston’s latest SPACE City Panel, conducted by the Center for Public Policy at the Hobby School of Public Affairs, shows that while 85 percent of Houston-area residents use AI, nearly 63 percent oppose the construction of AI data centers within 1 mile of their homes.

Respondents’ concerns centered around data centers’ high energy demand and the area’s power grid reliability. According to the survey, 32 percent of residents who oppose local data center projects would be more likely to support the centers if they relied on renewable energy over fossil fuels.

“Respondents understand that AI can bring economic and educational benefits, but they are also concerned about the physical infrastructure needed to fuel AI, especially data centers,” Soran Mohtadi, post-doctoral fellow at the Hobby School and a researcher on the report, said in a news release. “This physical infrastructure demands more electricity and water, leading to environmental impacts.”

Experts estimate that 6.5 gigawatts of data center capacity will be added to the Texas grid by 2030. And Houston’s data center capacity is predicted to more than double by 2028.

The Electric Reliability Council of Texas also projects electricity demand could reach 218 gigawatts by 2031, which would be more than double the record peak set in August 2023. Data centers are expected to account for 86 gigawatts of that new demand.

Survey respondents also said they are concerned about the state's future water supply, given the large amounts of water that data centers need to stay cool.

In terms of who’s responsible for that issue, 57.6 percent of respondents said they put the onus on Texas lawmakers, while 31.5 percent say tech companies should be responsible.

Additionally, more than 75 percent of respondents believed that data center developers and technology companies—not residents—should bear the cost of infrastructure upgrades to support data centers.

“Every decision legislators make has implications on residents’ everyday lives and local infrastructure now and in the future,” Maria P. Perez Arguelles, lead researcher on the report and research assistant professor at the Hobby School, added in the news release. “This issue is going to become more important in years to come, so this is just the beginning.”

Read the full report here.

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