Walking Fish Therapeutics, a biotech startup that attempted to create engineered B cell therapies, has shuttered, founder Rusty Williams confirmed to Endpoints News.
The South San Francisco biotech emerged in 2021 on the idea that scientists could turn B cells, which function like a factory that produces large amounts of proteins and antibodies, into therapeutics. It had 35 employees at its peak.
The company’s closure takes place at a time when biotech startups continue to weather a tough financing environment, which has led to other companies shutting down, layoffs and pipeline pruning. For companies raising capital for costly cell therapy trials, it’s especially difficult.
“The early trials in cell therapy are inefficient and expensive on per-patient cost,” Williams said.
Rusty WilliamsWalking Fish was within two months of requesting FDA approval to start its first clinical trial testing a B cell therapy in Fabry disease, a rare, genetic lysosomal storage disorder, Williams said.
A small group of biotechs have wondered if they could engineer B cells to treat a range of diseases, but it’s been a long road for developers in the space. Immusoft, founded more than a decade ago, was the first to test engineered B cells in humans. Be Biopharma, which has raised more than $180 million from ARCH Venture Partners and others, is also looking to get its engineered B cell medicines into clinical trials, starting in hemophilia B.
Walking Fish hoped to be the next to enter the clinic. It was working on raising a Series B to help fund the Phase 1 proof-of-concept study, Williams said, after having completed a $73 million Series A in early 2022.
For its Series B, the startup wanted 40% of the financing to come from new investors. The biotech had secured about 90% of that goal before an undisclosed internal investor backed out, citing real estate debt for a multiyear lease, and another followed suit at a “fateful board meeting in March,” according to Williams.
“It was very surprising that one of our key internal investors for the insider commitment at the last minute abruptly withdrew their commitment,” he said. “It was too late to replace them. They recommended that we close the company.”
Williams said it was a “shock” to him, the management team, the investors who didn’t have a seat on the board and the startup’s partners, and he thinks it could’ve been avoided. He and his team had tried finding ways to stay afloat, including a recapitalization (that didn’t receive board approval) and two rounds of layoffs.
“This is the best group of employees I’ve ever worked with,” said Williams, who founded Five Prime Therapeutics, which went public in 2013 and was bought by Amgen for $1.9 billion in 2021.
The company’s assets could now go to an auction, he said. Beyond Fabry disease, the startup also saw promise in using B cells for solid tumors, regenerative medicine applications, creating immune-inhibitory proteins for autoimmune disease and engineered antibodies for infectious disease.
Meanwhile, he’s already at work on his next venture as executive chair of a startup called Ten30 Bio, according to an SEC document filed in April by Protagonist Therapeutics, where he’s been a board member since 2017. Williams said he’s working with some colleagues from his days as head of R&D at Chiron to create oral protein degraders that get across the blood-brain barrier based on peptoid research. The startup could develop treatments for CNS diseases, oncology and hematology.
Williams is also taking his decadeslong work on proteins to the Institute for Protein Innovation, where he recently joined the board.