Lexeo Therapeutics Spins Out New RNA-Focused Biotech with $40 Million Backing

Lexeo Therapeutics, a genetic medicine developer, has announced the creation of a new biotechnology company focused on RNA-based treatments for heart conditions. The spinout, backed by up to $40 million from Perceptive Xontogeny Venture Funds and venBio Partners, aims to advance non-viral delivery methods for genetic medicines targeting cardiac diseases.

Strategic Spinout to Advance Cardiac RNA Therapeutics

The newly formed company will concentrate on developing RNA-based medicines for genetically mediated cardiac conditions using non-viral delivery methods. This strategic move allows Lexeo to capitalize on its expertise while creating a focused entity to drive innovation in this promising area of biotechnology.

Lexeo's CEO, R. Nolan Townsend, emphasized the potential of this venture, stating, "This spinout will help realize the therapeutic and economic value of promising preclinical science." Townsend highlighted how non-viral delivery methods could expand the application of genetic medicines to a broader range of conditions, particularly those affecting the heart.

Financial Structure and Future Prospects

Under the agreement, Lexeo will retain a double-digit percentage equity stake in the new company. Additionally, Lexeo stands to benefit from potential future milestone payments, royalties, and opt-in rights to the spinout's programs.

Fred Callori, managing director of PXV Funds, expressed enthusiasm for the venture, saying, "We see this as one of the most promising areas in biotech, where there is both a significant need and clear opportunity for innovation through the development of RNA therapeutics for cardiac disease."

Lexeo's Ongoing Clinical Programs and Recent Challenges

While launching this new venture, Lexeo continues to advance its own pipeline of genetic medicines. The company is currently developing treatments for heart conditions such as cardiomyopathy associated with Friedreich's ataxia and plakophilin-2 arrhythmia, both of which are in early-stage human studies.

Lexeo's Friedreich's ataxia drug, LX2006, showed promising interim results in an early-stage trial last year. The drug demonstrated a reduction in signs associated with heart complications among a small group of study participants. Lexeo has reached an agreement with the Food and Drug Administration on the design of a planned registrational study, which will assess the drug's efficacy by measuring levels of frataxin protein and reductions in left ventricular mass index.

Despite these advancements, Lexeo has faced challenges, including a smaller-than-projected IPO in 2023 and a recent 15% workforce reduction. The company has also indicated it is seeking "business development opportunities" for its portfolio of Alzheimer's disease treatments.