Cancer-Targeting Biotech Startup HotSpot Therapeutics Raises $100M

Biotechnology startup HotSpot Therapeutics drummed up $100 million in its newly announced and oversubscribed Series C funding round, company leaders announced Monday.

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The money will help the Boston-based cancer- and autoimmune disease-fighting startup push forward its pipeline of therapeutics through 2024, Jonathan Montagu, company co-founder and CEO, told Crunchbase News. 

Funds from the round will also allow the company to advance its AI-driven technology, called Smart Allostery. The platform helps HotSpot scientists identify and target disease-causing proteins in the body, called “natural hotspots,” which company leaders say have traditionally been overlooked. 

HotSpot Therapeutics uses its Smart Allostery-derived data about those hotspots to tailor treatments to those proteins. The result, Montagu said, are therapeutics—likely in the form of a pill—that can better treat certain illnesses that aren’t easily cured with other available methods. 

“We’ve been able to, in each case really at a molecular level, define which cancers and which autoimmune diseases are going to best respond to our therapies,” Montagu said. “That makes sure that we can actually get the right molecule to the right patient.” 

One of the company’s therapeutics will start clinical trials next year and could help treat lung cancer, Montagu said. 

The Series C was led by Pivotal bioVenture Partners, with participation by LSP and B Capital Group. 

Monashee Investment Management, CaaS Capital Management, Revelation Partners and Pavilion Capital were new investors during the round. Atlas Venture, Sofinnova Partners, SR One Capital Management were returning investors. The funds were managed by Tekla Capital Management and MRL Ventures Fund. 

“What’s also super exciting for us is the mixture of health care venture attention as well as the technology sector,” said Geraldine Harriman, HotSpot co-founder and CSO. “It’s having investors that are typically technology-focused investors, and really seeing the value of that interface between technology and medicine.” 

Ash Khanna, venture partner at Pivotal bioVenture Partners, and Fouad Azzam, general partner at LSP, will join HotSpot Therapeutics’ board of directors.

The recent round brings HotSpot’s total venture funding to $190 million. Its $65 million Series B closed in May 2020. 

“We are thrilled to be partnering with HotSpot as they advance their pipeline to the clinic and realize the promise of delivering potentially lifesaving therapeutics to patients,” Khanna said in a statement.  

HotSpot’s Series C comes as money flows into biotech and health care even faster than usual. Investments into venture-backed biotech and health care startups jumped from more than $82 billion in 2020 to almost $108 billion as of Oct. 31, 2021, Crunchbase data shows. 

While some of that new investment may have been drawn to the sector by the COVID-19 pandemic, HotSpot Therapeutics’ latest round shows that venture capital firms’ interests in the industry goes far beyond the current virus-induced health crisis. 

HotSpot has doubled its staff size over the pandemic and, while laboratory work generally cannot be done at home, the startup has tried to allow its workers to be remote as much as possible over the past year and a half. 

Now company leaders are looking ahead to building clinical trials for one of its therapeutics in the second half of 2021, Eva Jack, HotSpot COO, told Crunchbase News. 

“We’re trying to identify, as we think about the patient population we’d ultimately want to go after but also the experts in those fields, where are they located?” she said. “We’ve actually looked on a global scale already.” 

Illustration: Li-Anne Dias