Human technology

KKR backs medical start-up as private equity enters the sector

Replay, a US-based biotech company focused on genomic medicine, has attracted backing from private equity firm KKR and venture capital group OMX Ventures, as major investors show growing interest in start-ups in the sector.

The two companies led a major $55 million seed round at California-based Replay. Genomic medicine is a field that uses genomic information from patients to shape their clinical care.

Private equity interest in early-stage biotech companies comes despite what is often a ten-year wait for revenue as technologies are developed, but the Covid-19 pandemic has helped raise the profile of the sector. Private equity firms, including EQT, Carlyle and Abingworth, have all recently purchased or taken stakes in early-stage life sciences venture capital firms.

“We believe there is great basic science of life around the world, especially post-Covid. We would like to utilize both the financial and human strengths of KKR and invest behind it,” said Kugan Sathiyanandarajah, Managing Director of KKR and Board Member of Replay.

For a private equity firm, investing a huge amount of money so early in biotechnology is important. “We think there is a very attractive space here around early-stage biotech technologies that can have a strong fundamental impact,” Sathiyanandarajah added.

Lachlan MacKinnon, Managing Director and Co-Founder of Replay, said: “This is definitely a big round up. Our goal is to build a sustainable business that both commercializes products but also remains excellent at developing biotech technologies.

Replay has a series of genomic medicine tools designed to expand the conditions that gene therapies can treat, to include diseases such as muscular dystrophy and reduce the cost of cell therapies, which can be used to target tumors.

“We have the technology at Replay to essentially rewrite cellular genomes and give them the ability to secrete proteins that have anticancer properties, or allow cells to enter tumors,” added the executive chairman and co-founder. Adrian Woolfson. “Genomic medicine has the potential to transform the future of clinical therapeutics.”

The company plans to launch its first clinical trials “within two and a half to three years,” he added.