This startup fights bladder cancer with a genetically engineered virus

CG Oncology, led by Forbes 30 Under 30 alum Arthur Kuan, wants to replace the current treatment for a form of cancer that has been largely unchanged for decades.

Ethat same year, over 80,000 Americans are diagnosed with it. Nearly 800,000 Americans live with it, and about 16,000 are likely to die from it. It is the 6th most common cancer in the country. And yet you rarely hear about bladder cancer, says Gary Steinberg, a urologist on the faculty at Rush Medical College.

“There are celebrities who will talk about their lung cancer and they will talk about their colon cancer,” he says. “They’ll talk about breast cancer and their prostate cancer, but it’s very, very rare that you hear about their battle with bladder cancer.”

That’s in part, he says, because of the embarrassment people have about its impact on their normal bodily functions. Nevertheless, he says, it can be a “devastating disease” and it often comes back.

The available treatments are not much different than they were in the 1970s. But Steinberg is advising a startup focused on a potential new treatment: an immunotherapy developed by Irvine, CA-based CG Oncology designed to treat bladder cancer. In clinical trials so far, the company has seen promising results in bladder cancer patients unresponsive to other treatments, both by itself and in combination with Merck’s blockbuster cancer drug Keytruda.

If all goes well, the drug could be on the market as early as 2026. To help it get there, CG Oncology announced Wednesday that it has raised a $105 million crossover funding round led by TCGX and Foresite Capital. The company did not disclose the valuation, but CEO Arthur Kuan says it is higher than the company’s previous $120 million Series E round, which valued it at $400 million, according to Pitchbook.

“The bladder cancer market is so underserved that it really is a blue ocean,” says Kuan, a 32-year-old alumnus of the Forbes 30 Under 30 list in Healthcare.

Part of the reason for this is that treatment for bladder cancer has been largely unchanged since 1976. That’s when urologists began using a key drug, built with a bacteria known as “BCG,” after surgically removing a bladder cancer tumor from a patient. BCG is mainly used to trick the immune system into attacking cancer cells. The goal is to prevent the cancer from coming back—or at least slow its growth if it does.

But BCG lacks many of the benefits of modern cancer treatments and doesn’t work more than 30% of the time, putting patients at a higher risk of severe symptoms. It is also in short supply right now. Since 2017, there has been only one BCG manufacturer: Merck, which is unable to keep up with current demand. The company is building a new production center for BCG, which is primarily used to produce vaccines against tuberculosis, but it is not expected to go online until 2026.

The basis of CG Oncology’s bladder cancer treatment is a genetically engineered virus called Cretostimogene grenadenorepvec (aka CG0070). The virus targets a specific genetic signature found only in bladder cancer cells, which it attacks and destroys. This destruction releases chemical triggers that cause the body’s immune system to attack other tumor cells, creating a one-two punch that helps prevent the cancer from returning.

In a phase 2 clinical trial of CG0070, the drug was given to patients at high risk of bladder cancer who did not respond to BCG treatment or whose cancer came back – a population that is on particularly high risk for serious illness and death. The experiment showed that after 6 months, 47% of patients saw their cancer completely cleared up. By comparison, Merck’s cancer drug Keytruda, which has been approved by the FDA for the same patient group, had similar results for 41% of the population – but urologists have not adopted it as a treatment because its use often requires referring their patients to medical oncologists. Currently, CG0070 is in a phase 3 clinical trial, with final results expected next year.

Merck and CG Oncology are also working together on a clinical trial of CG0070 in combination with Keytruda. That’s because these drugs can work together to fight cancer, Kuan says. Cancers often grow in the body because they develop ways to hide from the body’s immune system. Keytruda basically works by unmasking the cancer, causing the immune system to attack it. Combining that with CG0070’s method of targeting cancer may yield better results than either alone, Kuan says. And so far, their clinical study seems to support this theory: Preliminary results from the trial showed that 87.5% of patients was cancer free after the 3 month mark.

Kuan began his journey with CG Oncology when he was an up-and-coming venture capitalist at Hong Kong-based Ally Bridge, which had invested in what was then called Cold Genesys. During that time, he fell in love with the company’s technology and mission and joined as Chief Operating Officer in 2015. He stepped in as interim CEO in 2016 when the company’s founder, Alex Yeung, stepped down from the role. The board voted shortly after to make the role permanent. Kuan was only 26. It seems pretty young to take command of a biotech company, but Kuan says his age had some advantages.

“They could have hired someone in their 50s or 60s who had been there and done that,” he says. “I think the advantage I had was precisely my younger age—I was much more focused on the problem.”

He has kept that focus in the years since, he says, by “going deep” into the bladder cancer space rather than trying to diversify the company’s technology into a broad platform like other biotech companies have. “We have now built the strongest relationships with key leaders in this area,” says Kuan. “We know their pain points and their needs very well.”

The investment community also sees promise in Kuan’s approach. Since the company’s founding, it has raised $308 million from venture firms such as Acorn Bioventures, Sirona Capital and DHVC, the vast majority of which was raised after Kuan took the reins as CEO. And although that number sounds like a lot, it is less than the average cost of bringing a drug to market, which is 2.2 billion. according to a recent report from Deloitte. “We’ve been very capital efficient,” says Kuan.

Michael Rome, a partner at Foresite Capital who co-led the new funding round, says the company’s track record and its game plan for the future puts it in a rare spot among biotech startups. “I don’t see private companies that are as late in development as CG,” he says.

As for what’s next for CG Oncology, the company expects to have final results from its current phase three clinical trial in the fourth quarter of 2024. If these are positive, Kuan says, the company will then apply for approval from the FDA. (There are still no guarantees—about 40% of drugs that reach phase three won’t be approved.) Meanwhile, the company is in talks with a manufacturing partner to scale up production of its drug once it gets the thumbs up. from the FDA.

After that, Kuan says his company plans to expand its clinical trials to test its drugs with bladder cancer patients at different risk levels and stages of the disease, hoping to one day replace BCG as the standard “go-to” for treating the disease.

“When we can achieve that, I think there are many different directions we can go,” he says. “And it’s all based on science alone.”


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