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Aardvark Raises $85M Series C

BIOTECH: Funds to Develop Hunger Reducing Drugs

LA JOLLA – Aardvark Therapeutics, a biotech startup working to develop drugs that reduce hunger, has raised $85 million for its Series C financing round.

The La Jolla-based company, which focuses on “hunger, not appetite” small molecule drug therapies to treat metabolic diseases, inflammation, among other areas  – raised venture capital dollars from a dozen-plus investors despite a challenging fundraise environment for early-stage biotech companies over the last twelve months.

Menlo Park-based Decheng Capital led the funding round. Additional investors who participated included Cormorant Asset Management, Surveyor Capital, SymBiosis, the Foundation for Prader-Willi Research, among several other backers.

Tien Lee
Founder and CEO
Aardvark Therapeutics

“One of the catalysts for this capital raise was that we demonstrated very strong Phase 2 data across three different trials,” Tien Lee, Founder and CEO of Aardvark Therapeutics, told the San Diego Business Journal.

It was a difficult time to raise capital, according to Lee. “The total funding for early-stage life science companies is slowly beginning to improve. Raising capital from investors has become increasingly more difficult to achieve over the years,” he said.

Gaining Momentum

The fresh capital will go towards its late-stage studies of the biotech’s candidate, the bitter taste receptor agonist ARD-101, in patients with Prader-Willi syndrome, a rare genetic dis-ease that can cause feelings of hunger.

“We believe our lead compound, ARD-101, is a well-differentiated first-in-class drug candidate that is orthogonal and complementary to existing obesity drugs and reduces hunger through the selective induction of gut-brain signaling,” said Lee.

Aardvark, which has less than 20 employees, also has a pipeline that includes an oral candi-date for overactive bladder, a topical for inflammatory skin disorders and an abuse deter-rent. The seven-year-old company’s goal is to file for approval and land an FDA nod in 2026.

$100 Billion-Plus Industry

The clinical and emerging commercial success of GLP-1 drugs developed by Novo Nordisk ($NVO) and Eli Lilly ($LLY) in diabetes and obesity has turned obesity drugs into one of the hottest categories in pharma.

The total addressable market for obesity drugs can range anywhere from $100 to $200 billion annually. “Even getting a small fragment of the market would be quite meaningful from a market share standpoint,” he said.

Over the last decade, giant pharmaceutical companies have invested billions in R&D and M&A activity. The strategic acquisitions made by major corporations is an attempt to fill “looming gaps” in their pipelines.

For example, Eli Lilly inked a deal worth $1.9 billion to buy Versanis Bio last August. In 2023, Novo Nordisk announced it had purchased Inversago Pharma for $1 billion-plus and Embark for $16 million respectively.

Optimistic Investors

Reputable investors are backing the San Diego company because of its mission, deep experience, and proven track record, according to the company.

Victor Tong, managing director at Decheng Capital, said his investment team decided to lead the financing round after being thoroughly impressed with the biotech’s pioneering work related to the Prader-Willi Syndrome disorder.

The San Francisco-based firm manages more than $2 billion in capital and previously invested in San Diego-based Prometheus Biosciences, which was acquired for $10.8B by Merck ($MRK) last June.

“The team has laid a strong foundation for the ARD-101 program,” said Tong. “We are excited to work closely with the Aardvark team to advance its clinical programs, aiming to overcome the challenges associated with Prader-Willi syndrome.”

Looking Forward

Prior to the Series C, Aardvark had disclosed a $29 million Series B in August 2021 and $15 million Series A in November 2019.

Aardvark plans to commercialize its drugs both in and outside the U.S., adding that over the next several years the goal is to have multiple programs in the clinic.

Aardvark may pursue an IPO in the near future, though the company hasn’t set a target date.

In the meantime, Lee said the company has enough cash to scale the biotech beyond the NDA filing. “We’re exploring all options,” said Lee. “We’re exploring all avenues for growth and want to build the company that we think will be successful.”

Aardvark, which is headquartered in University Town Center (UTC), employs about 15 people. The company anticipates to expand modestly.

“San Diego is well-suited for starting biotech companies,” he said. “There’s a lot of great companies, entrepreneurs and investors that are mutually supportive in the ecosystem.”

This year, there have been 10 financings totaling more than $80 million for therapeutic firms based in San Diego.

The largest three deals so far include Mirador Therapeutics ($400 million), Capstan Therapeutics ($175 million), and Avenzo Therapeutics ($150 million).

Aardvark Therapeutics
CEO: Tien Lee
HEADQUARTERS: University Town Center (UTC)
BUSINESS: Biotech company developing drugs that target hunger.
WEBSITE: aardvarktherapeutics.com
NOTABLE: The founder initially invested roughly $1 million of his own money to get the company off the ground.


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