A new biotechnology company emerged Thursday with $94 million in initial funding to develop treatments targeting brain disorders. The Boston-based firm, Newleos Therapeutics, has licensed multiple drug candidates from Swiss pharmaceutical company Roche and plans to advance treatments for various mental health conditions.
The company’s drug pipeline includes four candidates currently in human clinical trials, targeting conditions such as generalized anxiety disorder, substance use disorder, and cognitive impairment. These therapeutic candidates work by modulating various molecules and proteins involved in neural communication. The most advanced compound in Newleos’s portfolio has already completed Phase 1 testing and is being studied as a potential treatment for a rare genetic
neurodevelopmental condition.
The venture capital firm Longwood Fund played a pivotal role in establishing Newleos. Three Longwood team members have taken leadership positions in the new company: David Donabedian as CEO, William Martin as chief development officer, and Michael Miguel Sobral as head of strategy and operations. Federico Bolognani, who previously held leadership positions at Roche, VectivBio, and Therachon, joins as chief medical officer and co-founder.
Donabedian emphasized the significant unmet medical need in
neuropsychiatric conditions, noting that anxiety and substance use disorders affect more than 60 million individuals in the United States alone, representing over 25% of mental illnesses among American adults. The company plans to utilize its newly secured funding to conduct proof-of-concept clinical trials across its drug programs.
The Series A financing round was led by Goldman Sachs, with
participation from several prominent investors including Novo Holdings (the parent company of Ozempic manufacturer Novo Nordisk), DCVC Bio, and Arkin Bio Capital, alongside Longwood Fund.
This substantial investment in neuroscience research comes at a time when the field is experiencing renewed interest from venture capital firms. Investment in nervous system-focused startups exceeded $1.5 billion last year, marking a significant increase from the sub-$1 billion totals seen in both 2022 and 2023.
The launch of Newleos follows other recent successful fundraising efforts in the neuroscience sector. Last month, Atalanta Therapeutics secured $97 million from investors including F-Prime Capital and the venture divisions of Novartis and Sanofi, focusing on RNA interference technology to treat epilepsy and Huntington’s disease.
Longwood Fund has demonstrated ongoing commitment to neuroscience investment, having previously backed Engrail Therapeutics, which raised $157 million in Series B funding last March for its work on precision treatments for generalized anxiety disorder, depression, and PTSD.
Christoph Westphal, founding partner at Longwood Fund and executive chairman of Newleos’s board, highlighted the firm’s recognition of the limitations in current mental health treatments. The investment in Newleos represents another step toward addressing these therapeutic gaps with innovative approaches to brain disorders.
The emergence of Newleos adds to a growing trend of biotechnology companies focusing on neurological and psychiatric conditions, an area traditionally considered challenging for drug development but increasingly attracting substantial investment and scientific attention.