GlycoFi, a biotech company focused on yeast glycoengineering and optimization of biologic drug molecules, will be acquired by Merck & Co. for about $400 million (€314 million).
GlycoFi, which has about 55 employees, has raised about $34 million in VC funding since it was founded in 2000. Firms that invested in the company include Polaris Venture Partners, SV Life Sciences, Boston Millennia Partners, Peninsula Equity Partners, and Village Ventures. GlycoFi’s original seed investment was reportedly valued at under $3 million pre-money. Its $7 million Series B round in 2002 had a $7.2 million pre-money valuation.
Glycoengineering provides the ability to make proteins such as monoclonal antibodies from yeast in a way the company says is quicker and more cost-effective than other current methods. The technology could enable scientists to discover and produce new drugs and vaccines.
Terry McGuire, managing partner for founding investor Polaris Venture Partners, said Polaris spent $400,000 in the seed investment and $10 million over the long term. He said that initial research showed investment in this sector could be risky.
“In our due diligence, it was clear that others had tried this in the past and not succeeded, but we really believed that the team could solve these problems,” he said. “We saw that there was an enormous opportunity and therefore if we were successful, which we’ve now been, that it would really be a very worthwhile technology.”
Merck and GlycoFi have been partners since late 2005, when they established a research collaboration to develop new biologic and vaccine candidates.
“This company had the opportunity to either be acquired by a strong company like Merck, or in the longer run possibly be a public company because of the strength of its technology,” McGuire said. “The possibility that the company could be acquired was something we always kept in the back of our minds, so when the opportunity came to work with Merck it made a lot of sense.”