Gothenburg company attracts USD 70 million and joins growing health cluster
Today, Pretzel Therapeutics has operations in both Gothenburg and Boston, USA. In 2023 the Swedish team will move into the new facility in Gothenburg located at GoCo Health Innovation City, a few hundred metres from one of AstraZeneca’s three global R&D centres. From there, the company will continue its development of ground-breaking solutions for the treatment of diseases related to mitochondrial dysfunction, including both rare genetic diseases and more common diseases of aging.
“Our relocation to GoCo House will be an important milestone for Pretzel. Our expanded footprint will enable us to continue scaling up our R&D operations, while the modern and well-equipped office and lab facility will benefit our recruitment and retention of world-class scientific talent. We look forward to building relationships and fostering innovation within this exciting life science community,” said Baruch Harris, Chief Operating Officer at Pretzel Therapeutics, when the investment was announced.
Backed by a world-class investor syndicate
When the company launched in September 2022, the financing was led by ARCH Venture Partners and Mubadala Capital with participating investors HealthCap, Cambridge Innovation Capital, Cambridge Enterprise, Angelini Ventures, GV, Invus, Eir Ventures, GU Ventures, and Karolinska Institutet Holding.
“Pretzel’s co-founder Paul Thurk, a managing director with ARCH Venture Partners, was motivated to create the company based on his knowledge of the cutting-edge work of Pretzel’s scientific founders and his conviction that this research held great therapeutic potential. Pretzel’s founders felt the time was ripe for a company that could leverage all of mitochondrial biology, not just one pathway or one drug, to treat disease,” says Jay Parrish, CEO at Pretzel Therapeutics.
In total the company raised USD 72.5 million, equivalent to nearly SEK 750 million.
“The huge potential of their technological platform is corroborated by the investor syndicate. There aren’t many Gothenburg nor European biotech companies that succeed in attracting such a large amount of capital at such an early stage. Their technology is not only innovative but has potential to disrupt the market,” says Iris Öhrn, investment adviser for life science at Business Region Göteborg.
With the scaling up of its R&D activities in Gothenburg, the company will focus on advancing its preclinical research. In the coming years, after some key milestones are reached, the company will be ready to enter clinical trials with at least one of its lead candidates.
“The research groups of Prof. Maria Falkenberg and myself have studied mitochondrial biology and the mechanisms underlying mitochondrial disease for more than 20 years. To see our work being translated into precision therapies that can improve people’s lives is extremely gratifying. I am also excited to see the many excellent, young scientists we have recruited to Pretzel, who now get a chance to work with seasoned experts from the start-up scene in Boston. You cannot get a better crash course in drug development and entrepreneurship,” says Claes Gustafsson, professor of medical biochemistry at the University of Gothenburg and a co-founder of Pretzel Therapeutics.
Strong ties to Gothenburg
GU Ventures in Gothenburg was one of the first to invest in Pretzel Therapeutics. The university run incubator builds businesses and invests in innovative ideas with connections to the University of Gothenburg. Around half of its portfolio companies are in the life science space, and of these, half are pharma companies. GU Ventures has been involved in the start-up of innovative and successful life science companies such as BICO (Cellink) and Surgical Science.
In the case of Pretzel Therapeutics, GU Ventures first came in contact with Professor Claes Gustafsson already in 2019.
“All pieces of the puzzle were there. And we knew that we might have in front of us, the seed to what could lead to the next Gothenburg success within life science,” says Klementina Österberg, CEO of GU Ventures.
The expertise available in Gothenburg and the region’s innovation ecosystem have played an important role in Pretzel’s journey, explains Jay Parrish, Chairman and CEO at Pretzel Therapeutics.
“We have benefitted from the high density of talent in the Gothenburg region, facilitated by the presence of a leading university, as well as the growing biotechnology ecosystem in the area. Further development of the local biotech ecosystem – science, intellectual property, infrastructure, services, etc. – will benefit not only Pretzel but any other biotech companies that want to start up in the area.”
Iris Öhrn explains that Gothenburg is home to some cutting-edge research and that the region has a lot of potential when it comes to its commercialization.
“When you add to the recipe a leading research institution, entrepreneurial mindset, a well-developed innovation system, local investors willing to syndicate and a born global project, you have most of the ingredients you need to succeed. I am sure we will see new ‘Pretzels’, especially based on research related to immune-oncology, advanced therapeutics and system biology, which are areas where Gothenburg is already excelling,” says Iris Öhrn.
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