- The gene-editing leader Intellia Therapeutics just bought a tiny biotech startup called Rewrite.
- Insider talked with Rewrite CEO Shakked Halperin about how he built and sold the company.
- Rewrite raised $2 million in its short history before selling in a deal potentially worth $200 million.
In late 2021, Rewrite Therapeutics CEO Shakked Halperin received stunning news — Intellia Therapeutics, the world’s largest gene-editing company, wanted to buy his tiny four-person startup.
Initially founded in 2020 by Halperin, a first-time CEO, Rewrite is developing a new gene-editing technology that builds on the Nobel Prize-winning discovery of CRISPR. The California startup raised just $2 million in its two-year history before announcing earlier this month that Intellia will acquire the business in a deal paying $45 million up front and potentially $200 million overall depending on certain research and regulatory achievements.
“We could not be more excited to add Rewrite’s additional capabilities to our growing platform, offering us new possibilities and the potential to target diseases beyond those currently being explored in our pipeline,” Intellia CEO John Leonard said in a statement.
The journey of Rewrite and its founder shows how entrepreneurs and investors can succeed in building lean biotechs that can sell for a profit at a time when much of the VC world has gravitated to megarounds.
In the past year, for example, the gene-editing startup Prime Medicine raised $315 million in initial financing, the neurology biotech Neumora Therapeutics touted a $400 million Series A round, and the cell-programming startup Altos Labs launched with an eye-popping $3 billion in funding.
In that ecosystem, Rewrite’s $2 million in funding is almost like a joke, Halperin told Insider in an interview.
Yet his 2-year-old company with four full-time employees was able to secure the interest of Intellia, to the tune of a potentially nine-figure acquisition. Insider talked with Halperin on how he grew and ultimately sold his first startup.
Halperin founded Rewrite, his first company, from doctoral research
Halperin arrived at the University of California, Berkeley for graduate school in 2015 as CRISPR gene-editing technology was exploding into the mainstream. The discovery in 2012 had quickly led to the formation of several biotechs, now worth billions, that hoped to cure diseases by fixing genetic mutations.
During his doctoral studies in bioengineering, Halperin pitched a research idea to his advisors: Could CRISPR be tweaked to make targeted changes in DNA without fully cutting DNA strands to avoid safety concerns? And could another element be added to the mix, called a DNA polymerase, that makes new DNA containing an edit at the CRISPR target site?
“It did not fly,” Halperin said, as he rotated through several labs and was assigned to other projects. Eventually, he asked John Dueber, one of his advisors, if he could work nights and weekends on his novel DNA-writing idea. He got the approach to work in bacteria, which turned into his doctorate research. Halperin was the lead author in a paper published in 2018 in Nature, spurring him to form a shell company and acquire the intellectual-property rights.
In February 2020, he started working full time as the founding CEO of Rewrite at 28 years old. Right away, growth plans were thrown out as the COVID-19 pandemic took off.
“Hiring plans just got trashed,” Halperin said. “I just bunkered down and was labbing solo around the clock.”
Halperin worked on improving the precision of the edits for his CRISPR-guided DNA polymerases. These advances, which have not been published, led the technology to look more like a gene-editing tool that can target specific genes, he said.
As a first-time CEO, Halperin said he learned a lot about the business side of running a company, particularly in thinking about compensation and financing as well as pitching the company’s story to potential investors and employees. Overall, Rewrite has four full-time employees working as scientists, along with two part-time employees who run operations and business development.
“You have to shake off the Ph.D. if you want to step into the CEO role,” Halperin said. “The Ph.D. forces you to be so obsessed with precision that it can get in the way of vision.”
In total, Rewrite raised $2 million over its two years in existence, primarily from Civilization Ventures, a tiny tech-focused VC firm.
Halperin weighed a deal with Intellia against raising a $35 million Series A
As often happens in biotech, the Intellia acquisition started as a discussion about a potential partnership. Halperin was impressed with Intellia’s work — the biotech published the first human data on a CRISPR-based editing treatment delivered inside the body in June.
Halperin and his business-development head reached out in August to Intellia’s chief scientific officer, Laura Sepp-Lorenzino. After sending along a pitch deck, the two companies talked on video calls for several months, Halperin said. Having the Berkeley professor David Schaffer as an advisor and cofounder also helped, Halperin said.
“I was a nobody, and I think Intellia’s CSO Laura was fond of Dave’s work, and maybe that ended up being kind of a little wedge,” he said.
After a few months, Halperin shared with Intellia that he was raising a Series A round. The startup was preparing to close $35 million in financing from blue-chip investors, and Halperin was planning on entering exclusive negotiations on November 1 to secure that funding. All of a sudden, Intellia was interested in not just a partnership but a buyout.
“When we communicated about the Series A coming to a close, there was all of a sudden interest to discuss acquisition,” he said. “It was very surprising to us. It wasn’t our intention whatsoever.”
In deciding between the Series A and acquisition, Halperin said he talked with his employees and investors about what they saw as a good outcome. Facing a firm deadline in raising a Series A, Halperin said they didn’t have enough time to run a bidding process in which M&A experts would reach out to other potential buyers to see whether there was other interest. Ultimately he decided it was the right move for him and the company to sell.
Halperin has already started working on his next venture
As for what’s next, the 30-year-old scientist already has a new idea. He will consult for Intellia on Rewrite’s work, but he’s mainly focused on his next company, which he said is planning to leapfrog a lot of the challenges facing the gene-editing field. The ultimate goal, he said, is to have a system that can make any modification you’d like to the genome.
As for details — even the startup’s working name — he declined to share, but he said he’s looking forward to building on his experience running Rewrite.
“I’m excited to take the lessons learned and go again,” he said.
Credit: Source link
