An Ottawa biotech startup has raised millions of dollars to scale up its technology that aims to “supercharge” production of a key component in emerging gene therapies for cancer and other diseases.
Virica Biotech announced the series-A round, which was led by New York-based Dynamk Capital, on Monday. The company did not reveal the exact value of the deal, which is expected to close later this year with additional contributions from follow-on investors, but co-founder and CEO Jean-Simon Diallo said it was a “multimillion-dollar” investment.
Founded in 2018, Virica Biotech makes specialized compounds that help boost production of viral vectors, which deliver material into infected cells that’s designed to fix defective genes responsible for diseases such as cancer and hereditary blindness.
OBJ360 (Sponsored)
Investing in the next generation: Ottawa businesses encouraged to build futures through mentorship
Do you remember the mentor in your life who helped shape your career? In the business world, success often depends on the connections we build, fuelled by guidance and support
World Junior Championships set to boost Ottawa’s economy and global reputation
The World Junior Championships will kick off in Ottawa in December, bringing tens of millions of dollars of economic activity to the city, as well as a chance for local
Diallo used a cooking analogy to describe the process, likening viral vectors to kernels of popcorn that need the catalyst his firm provides to rapidly reproduce.
“If you don’t apply some heat, you’re going to get maybe a few popped kernels, but that’s it,” he said. “Adding our (product) basically allows you to fully pop the popcorn. We’re kind of supercharging the microwave, if you will.”
Funding challenge
Diallo began working on the technology alongside pioneering Ottawa Hospital cancer researcher Dr. John Bell a decade ago as a way to help cancer-fighting viruses bypass the human immune system’s defences.
When financing proved hard to come by due to the lengthy approvals process for such therapies, Diallo found another use for the compound that didn’t require the same stringent testing: an additive to boost the effectiveness of traditional vaccines that contain virus particles.
Investors soon took note, and the company raised nearly a million dollars in seed funding by early 2020, just as the pandemic triggered a worldwide R&D effort to develop a new vaccine against COVID-19.
While his compound doesn’t work on mRNA vaccines that have widely used in the fight against the coronavirus, Diallo says the pandemic gave his firm a proverbial shot in the arm nonetheless.
“It forced us to get set up very quickly,” he explained. “There was certainly a lot of interest in the technology. COVID kind of got us moving. We realized that the opportunity for improving the manufacturing yield of gene therapies in particular was quite enormous.”
Revenues doubled
Diallo says Virica now has contracts with more than 20 manufacturers of gene therapies that hope his products will make their treatments cheaper and more effective.
The firm’s revenues have more than doubled in the past 18 months, and Diallo expects Virica’s headcount to grow from 16 to at least 30 by next year as demand for its technology ramps up. In addition, he says he still sees a big upside in the vaccine market, which now accounts for about 15 per cent of the firm’s sales.
“Historically, the vaccine industry has always been very slow to move,” he said. “Hopefully, (the COVID) crisis will change things a little bit for the better because everybody had to kind of roll up their sleeves and innovate.”
Virica was initially based out of Bayview Yards as part of Invest Ottawa’s pre-accelerator program. But the growing startup struggled to find suitable lab space in the region until the new Ottawa of Ottawa Health Innovation Hub helped it secure a 3,000-square-foot facility at the University of Ottawa Heart Institute that officially opened this week.
Diallo, a biochemistry professor at uOttawa and a senior scientist at the Ottawa Hospital Research Institute, said he considered moving the company to Montreal and Toronto. He called on the city’s business and political leaders to beef up support for biotech ventures like his that are in the early stages of commercializing their products.
“We were really glad to be able to stay in Ottawa,” Diallo said. “There is a biotech sector in Ottawa, it is growing and we need to work together to foster it. Otherwise, people like me are going to leave. It’s that simple.”
