Wellington Partners makes seed investment in Sirs Therapeutics

Following the investment, the company will jointly own all rights to FX06, a fibrin-derived peptide used in the treatment of patients with acute respiratory distress syndrome (ARDS) and systemic inflammatory response, along with Austria-based F4 Pharma.

Wellington Partners deployed equity via Wellington Partners Life Science Fund V, which held a final close in July 2019 on €210m.

Rainer Strohmenger, managing partner at Wellington, explained the firm's rationale behind the investment. "We wanted to invest in the development of the compound FX06, which was owned by F4 Pharma. Due to the lockdown, originally the idea was to spin off and invest in the new company, but in the interest of speed, we decided to invest in our new company, which then acquired 50% of the rights, with the idea to merge them later on. But this was the fastest was forward, as it's not easy to travel."

Strohmenger added that Wellington's investment enabled the company to acquire half of the rights to FX06. "Sirs Therapeutics has this therapy as its sole purpose. Our fund is the majority owner of Sirs Therapeutics, we funded the company and it acquired 50% of the rights to FX06, which is already far advanced as a development-stage drug candidate – it has already been through a phase-II clinical trial with a good result."

The company is currently at an early stage, but Strohmenger told Unquote that the firm plans to provide further support in its development. "Sirs Therapeutics is currently a virtual company with one part-time employee. The idea is to prove some efficacy in late-stage Covid-19 patients in at least one clinical trial that is now in the planning phase, and then we could either merge this into another company or sell the entire project. We could even decide to fund the company and take it further ourselves."

Wellington Partners Life Sciences Fund V is currently around 50% deployed. Strohmenger told Unquote that the fund will be able to support Sirs Therapeutics and its other portfolio companies with follow-on investments. "As a life sciences investor, you always need to have some follow-on capital. The fifth fund has sufficient reserves to increase the allocation for the portfolio companies – you need to invest if there are opportunities and that is what we will do."

Strohmenger emphasised the importance of the development of the compound in the treatment of Covid-19. "There is a lot of interest from many of the large centres to test new compounds in late-stage patients with acute lung failure who are on mechanical ventilation. Currently there is no drug to treat this and we believe that there are strong hints that the condition is caused by vascular leakage in the inner layer of the blood vessels, especially in the lungs, which is why there is an accumulation of fluid in the lungs that makes it difficult to breathe. This is exactly what this compound is able to address."

He added that there is precedent for its effectiveness: "It has shown efficacy in three pre-clinical models of viral infections, including inhaled viral infections. It went through compassionate use in the one Ebola patient we had in Germany and it cured them. The idea at that time was to develop the treatment for that, but the Ebola epidemic was stopped."

Beyond Sirs Therapeutics, Strohmenger told Unquote that Wellington is also supporting initiatives to fight Covid-19 within its other portfolio companies. "We are also an investor in Themis Bioscience, an Austrian company that is developing a vaccine, and this could become the frontrunner, as the vaccine is based on a genetically modified measles vaccine that can be produced in hundreds of millions of doses, which is not the case for any other vaccine in development that we are aware of. We hope they can develop an effective vaccine and scale up production. They can deliver 10 million doses by the year end and hundreds of millions in H1 2021."

Fund V portfolio company Andromed is also developing coronavirus-related treatments, Strohmenger said. "We are also investors in Andrenomed, which has completed phase-II tests in septic shock. In severe Covid-19 cases they also go into a kind of septic shock, so the antibody has the potential to be effective in that disease."

Quanta Dialysis Technologies, another Fund V portfolio company, is also developing technologies with coronavirus-related applications, Strohmenger said. "With Quanta, we are currently preparing for market entry in the UK and we are receiving interest from intensive care units there, as a large percentage require haemodialysis treatment and there are just not enough machines available. We will deploy more equity to fund this and will support the companies to develop these products and bring them to markets as fast as possible."

Asked about potential exit opportunities and strategies for such companies, Strohmenger said: "We always try to have as many exit opportunities as possible in our companies; Themis, Quanta and Andrenomed are already very attractive for the large strategic players, but they also have the option to pursue an IPO. Looking at public markets and companies developing products to treat the pandemic, their share prices are trading very high."

Company
Founded in 2020, Sirs Therapeutics is an early-stage company that will focus on the clinical development and testing of treatments for coronavirus and respiratory diseases using the compound FX06, a fibrin-derived peptide that it now owns jointly with F4 Pharma.

People
Wellington Partners – Rainer Strohmenger (managing partner).

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• Topics
• Early-stage
• DACH
• Healthcare
• Venture
• Germany
• Wellington Partners
• coronavirus