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Friday, Mar 31, 2023

CG Oncology Raises $120M for Research

Bladder cancer drug a 'game changer,' says investor

CG Oncology Inc. has spent more than a decade trying to find solutions to bladder cancer.

Investors believe the Irvine-based oncology researcher is getting closer.

The immunotherapy company on Nov. 15 announced it raised $120 million in a Series E financing round that was oversubscribed.

“We’ve been publishing really good clinical data,” CG Oncology Chief Executive Arthur Kuan told the Business Journal. “Several investors have been tracking our progress. When the data first came out in June, that’s when all the interests aligned.”

The company has secured a total of over $200 million in funding since its founding in 2010; its Series D, announced two years ago, raised $47 million.

The latest proceeds will be used to advance the company’s lead clinical programs in bladder cancer toward FDA approval for its drug called CG0070.

“We see tremendous potential for CG0070 to be a game changer,” said Simone Song, founder and senior partner of Hong Kong’s ORI Capital, which led the latest Series E round as well as its Series C round.

Limited Options

Bladder cancer is the sixth most common form of cancer in the U.S., with an estimated 81,000 new cases this year. The median age of diagnosis is 73, with men four times more likely to get it than women.

It’s a disease that is costly to the healthcare system because of an intense follow-up schedule for patients. Up to 50% of high-risk patients will see symptoms recur within a year.

A bladder cancer patient has limited options. Either the bladder must be removed or repaired, which has a high fatality rate, or medications are administered.

Chemotherapy often doesn’t work because the bladder, as would be expected, urinates the anti-cancer drugs out.

CG’s “oncolytic immunotherapy,” in contrast, uses genetically modified viruses to target tumors in the bladder.

The current front-line or first-choice therapy for non-muscle invasive bladder cancer patients is a Merck-manufactured drug called BCG.

CG Oncology, which has ongoing Phase 2 and 3 trials, has administered its CG0070 drug to over 200 patients.

It entered a clinical collaboration with Merck to evaluate the combination of CG0070 with another drug, Pembrolizumab, in its test, called CORE1.

The company on Nov. 10 announced interim data for CORE1 at the Society for Immunotherapy of Cancer’s annual meeting.

Twenty-eight out of 32 patients, or 88%, reported “a complete resolution of their tumors in their bladders after three months,” Kuan said.

By contrast, Merck’s BCG drug has a 41% success rate.

“We more than doubled what they’re seeing thus far,” the CEO said.

What made investors most excited were initial 12-month rates that showed few patients got cancer again, Kuan said.

“The effects are quite enormous. It’s looking encouraging.”

Ally Tie

Besides ORI Capital, the other co-leaders of the Series E investing round were Longitude Capital and Decheng Capital, with participation from RA Capital Management, Acorn Bioventures, Malin Corp., Sirona Capital and Ally Bridge Group.

One of the latest investors, Hong Kong-based Ally Bridge, was co-founded by Kuan, who holds a master’s degree in biotechnology from Johns Hopkins University.

Kuan has long been interested in pharmaceutical research, having lost his father to pancreatic cancer.

The VC firm stumbled upon CG Oncology, which was known as Cold Genesys and located in Newport Beach at the time. Ally Bridge, which invested in CG’s Series A in 2014, is also a backer of Laguna Hills-based dental-focused device maker Sonendo Inc. and local device maker Mavrik Dental Inc.

Kuan ended up leaving Ally Bridge to join CG Oncology as its COO in 2015, taking over as CEO a year later when founder Alex Yeung retired.

In recent years, Kuan’s been recognized by Business Insider and Forbes as a young executive making an impact in healthcare.

Next Steps

Kuan declined to say whether CG Oncology will go public, saying the financing will provide “a good two years of runway.”

The company has 50 employees with plans to add about 15 more in the coming year, Kuan said. Its base is at the 400 Spectrum Center office tower.

“We’re looking forward to growing the company,” he said.

“We are trying to save people’s lives.”

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Peter J. Brennan
Peter J. Brennan
Peter J. Brennan has been a journalist for 40 years. He spent a decade in Latin America covering wars, narcotic traffickers, earthquakes, and business. His resume includes 15 years at Bloomberg News where his headlines and articles sometimes moved the market caps of companies he covered by hundreds of millions of dollars. His articles have been published worldwide, including the New York Times and the Washington Post; he's appeared on CNN, CBC, BBC, and Bloomberg TV. He was awarded a Kiplinger Fellowship at The Ohio State University.

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