The innovative epigenetic drugs space has witnessed a two-fold increase in Series A venture financing, with total deal value increasing from $172m in 2019 to $342m in 2024 year-to-date (YTD), according to GlobalData’s Pharma Intelligence Center Deals Database. In January 2024, Moonwalk Biosciences launched with $57m of seed and series A financing to develop its epigenetic discovery platform technology.
Epigenetic drugs induce heritable modifications to genetic material that result in changes in gene expression without altering the DNA sequence. Marketed epigenetic drugs have shown success in blood cancers, such as DNA methyltransferase (DNMT) inhibitors such as Celgene’s Vidaza (azacitidine) and Eisai’s Dacogen (decitabine) and histone deacetylase (HDAC) inhibitors such as MSD’s Zolinza (vorinostat) and Acrotech Biopharma’s Beleodaq (belinostat). However, these drugs act in a genome-wide and tissue-wide manner, resulting in off-target effects and subsequent toxicity.
As such, biotech start-ups are developing a new generation of epigenetic drugs with improved gene specificity to enhance efficacy, improve tolerability, and target indications beyond oncology. The FDA’s approval of Vertex Pharmaceuticals’ Casgevy (exagamglogene autotemcel), the first clustered regularly interspaced short palindromic repeats (CRISPR) gene editing therapy, for the treatment of beta-thalassemia and sickle cell disease in December 2023 has further fueled investor confidence in epigenetic drugs, as they offer a safer alternative to gene editing by not introducing cuts into the DNA.
According to GlobalData’s Pharma Intelligence Center Deals Database, series A venture financing for companies developing epigenetic drugs during 2019–24 YTD witnessed a total deal value of over $1bn, and more than half of these companies are headquartered in the US. Notably, there was a 375% surge in total deal value to $342m from 2023 to 2024 YTD, with 2024 YTD already surpassing 2020 as the highest total deal value in a year.
In March 2024, Avenzo Therapeutics raised $150m—the largest round of series A financing for epigenetic drugs received in the last five years—to develop its cyclin-dependent kinase 2 (CDK2) inhibitor ARTS-021, which is currently in a Phase I/II study for solid tumours and hormone receptor-positive (HR+)/human epidermal growth factor receptor 2-negative (HER2-) metastatic breast cancer. In July 2022, California-based Epicrispr Biotechnologies launched with $55m in Series A financing to advance its preclinical pipeline and further drug discovery, using its CRISPR-based epigenetic platform technology with adeno-associated virus (AAV) as a delivery vector. K36 Therapeutics is another epigenetics company that received $30m in series A venture financing in December 2021 to develop its MMSET inhibitor KTX-1001, which is currently in Phase I trials for multiple myeloma.
Epigenetic drugs play a key part in precision medicine by providing tailored treatments with improved patient outcomes and reduced off-target effects. Investors are increasingly focused on drug modalities within precision medicine, with an increase in early-stage investment in epigenetic drug development. However, companies developing innovative epigenetic drugs must overcome challenges including maintaining durable effects on gene expression, ensuring the delivery of large epigenetic drug components into the target tissue, and demonstrating safety and efficacy in clinical trials to enable the success of this drug class when brought to market.
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