GBS invests in US-based biotech

Australian biotech venture capitalists GBS Venture Partners has invested in US-based therapeutic antibody company KaloBios Pharmaceuticals as part of a US$20 million series B financing round.

KaloBios plans to use the funds to move its most advanced projects into clinical evaluation. The company has developed a proprietary technology for humanising or "humaneering" antibodies against clinically relevant targets.

Last year, KaloBios acquired the rights to an antibody-based therapy for rheumatoid arthritis developed by scientists at the Ludwig Institute of Cancer Research in Melbourne. It is one of two projects the company is hoping to move into clinical development, along with a therapeutic antibody for Pseudomonas lung infections in cystic fibrosis patients.

Other investors in the company include MPM Capital, which along with GBS, led the series B round, as well as Lotus BioScience Ventures and existing investors Sofinnova Ventures, Alloy Ventures, 5AM Ventures and Singapore BioInnovations.

CEO Geoff Yarranton said the company was delighted to have attracted such a seasoned group of investors.

It's not the first time that GBS has looked outside Australia in its quest to develop Australian technology. The company has been a strong backer of Phenomix, a US- and Australia-based company which is developing physiologically relevant animal models and drug targets using forward genetics. And more recently, it backed Kiwi company Proacta in a round of financing that also included Genentech and Roche as investors.

"This is a model we employ pretty often ... to commercialise Australian technology but to have a US office," said GBS principal Brigitte Smith. "These are relatively early stage companies -- companies that are likely to need subsequent funding rounds. It's less about the final customer being in the US and more that the sources of capital are much bigger in the US."

Smith said it was easier to get larger follow-on rounds of funding in the US, whereas typically in Australia companies had to consider the capital markets.

In addition, she said, the management team of KaloBios had a lot of experience in commercialising antibody-based therapeutics that would not have been readily available to a company based in Australia.