This story was reported with support from our partner The Penn Center for Innovation. PCI helps to translate discoveries and ideas created at the University of Pennsylvania into new products and businesses for societal benefit.
Startup profile: Dispatch Bio
Founded by: Lex Johnson, Ray Liu, Andy Minn, Carl June, Chris Garcia, Kole Roybal
Year founded: 2023
Headquarters: Philadelphia, PA
Sector: Biotech
Funding and valuation: $216 million raised at $279 million valuation, according to PitchBook
Key ecosystem partners: Penn Center for Innovation
Thanks to science from institutions across the country, a local biotech company is working to develop a more widely applicable treatment for cancer patients.
Penn spinout Dispatch Bio is developing a cancer treatment that uses a virus to identify tumor cells, then administers cell therapies to kill them. The company is about to start its first clinical trial, a step towards making the treatment available for patients, Lex Johnson, cofounder and chief platform officer, told Technical.ly.
“We’d like to see this platform in the hands of tens of thousands of cancer patients who really need new options, and we were committed to finding a way to make that happen,” Johnson said.
“We’d like to see this platform in the hands of tens of thousands of cancer patients.”
Lex Johnson, Dispatch Bio
The University City-based company’s product platform is called Flare. It administers a virus that travels throughout the body looking for tumor cells. Once it finds them, it tags their exterior with a target. The target is then recognized by a therapy designed to destroy the cancer.
“The virus itself can be used across many different tumor types, and therefore that standardized target is very advantageous for reaching more patients,” Johnson said.
It’s also actively replicating and continuously finding more cancer cells to flag, he said, so the therapy can keep killing the cancer.
Traditional cancer therapies look for targets on the cells that already exist, Johnson explained, so a lot of existing drugs only work for a narrow pool of patients with the exact type of target. Plus, sometimes these naturally occurring targets only exist on parts of the tumor, not on every cell, he said.
Dispatch’s product spun out from research at the University of Pennsylvania and other medical institutions around the country. Johnson first worked on parts of the technology as a PhD student in a lab run by well-known cell therapy researcher Carl June and cancer researcher Andy Minn at Penn.
The lab’s team thought it would be a good idea to spin the tech out into its own company as it prepared for clinical trials, per Johnson. He was acting CEO for the first few years of the company, building partnerships with the Parker Institute for Cancer Immunotherapy and forming a company around the tech he was working on, along with science from researchers at Stanford University and the University of California San Francisco.
Johnson heavily tapped into the wider Penn ecosystem to get the company set up, he said. He took classes at Wharton that led him to meeting people that helped with setting up Dispatch’s legal structure and made fundraising connections.
“Penn as a place [that] has this entire ecosystem that you can tap into, was absolutely foundational for Dispatch,” he said. “If I was just sitting alone, at a kitchen table without any help, it would have been a significantly longer and harder road.”
Collecting data to support future raises
Dispatch Bio has raised $216 million so far. Funding has ebbed and flowed along with the trends of venture capital over the last five years, Johnson said.
At the start of the company, the venture capital environment was enthusiastic about biotech and it made raising relatively easy, he said.
However, the nature of the sector is that a lot of companies don’t find compelling data after their first round of clinical trials and they end up going under. This means investors don’t get returns on their investment, and are unlikely to stay interested in the industry, he said.
Last year, the fundraising environment for biotech companies was difficult, although conditions seem to have improved this year. In general, Philly’s venture capital numbers have been steady this year, although the money coming seems to be largely concentrated amongst a few companies.
As Johnson watches industry trends, he sees that the companies being funded or exiting have strong clinical data to back them up, he said. In the near future, the company is focused on collecting that data.
“Our goal at Dispatch is to raise money to fund us to meaningful milestones,” Johnson said. “Right now, that next milestone is clinical data, and so we’re really focused on proving that the platform is capable of delivering what we believe.”