Arialys Therapeutics Raises $58M to Target Autoimmune Neuropsychiatric Diseases

By Uduak Thomas

Arialys Therapeutics is seeking to make its mark on the neurological market by developing treatments for autoimmune neuropsychiatric diseases. Recently, the company secured $58 million in seed financing to continue developing its first drug, a compound that blocks pathogenic autoantibodies in the central nervous system. Investors in the financing included the company’s founding investors, Avalon BioVentures, Catalys Pacific, and MPM BioImpact, along with Johnson & Johnson Innovation—JJDC, Inc. and Alexandria Venture Investments. 

The company officially launched in December 2021 and has been working quietly in stealth mode until now. Arialys is developing an antibody therapeutic, ART5803, to treat anti-NMDA receptor encephalitis (ANRE), one of the most common forms of autoimmune encephalitis. ANRE is caused by crosslinking autoantibodies that drive internalization of NMDA receptors (NMDAR) resulting in seizures and psychosis in patients. ART5803 is a single-arm antibody that treats ANRE by binding to the same epitope as the NMDAR autoantibodies and blocking them from binding. Arialys purchased ART5803 from Astellas Pharma who had been developing the drug as a treatment for ANRE. That deal closed in 2022.

“Recent scientific discoveries have implicated abnormal autoimmune activity in a number of neuropsychiatric diseases, pointing us in a new direction to develop precision medicines for CNS disorders,” Jay Lichter, PhD, president and CEO of Arialys and managing partner of Avalon BioVentures, said in a statement. These discoveries upended a long-held belief among scientists that the immune system does not operate in the central nervous system, he explained in a conversation with GEN. The fact that it does opens up the possibility of developing novel drugs to treat autoimmune diseases that affect the CNS like ANRE.

Although it is one of the most common forms of autoimmune encephalitis, ANRE cases are relatively rare affecting roughly 2,000–3,000 people in the United States annually. Scientists are not sure what triggers the condition but the evidence suggests that it affects women more than men—women are four times more likely to develop ANRE. And it is more common in people under the age of 40. 

One risk factor for women is the presence of ovarian teratomas—this occurs in about a third of women with ANRE. The teratomas express NMDA receptors which are treated as foreign entities by the immune system since they are typically only expressed in the brain. Their presence triggers the body to make autoantibodies which go on to attack the NMDA receptors causing the disease. 

But the disease can also be caused by infections. For example, Lichter explained that the epitope that the autoantibodies bind to in the body is similar to one present in the Toxoplasmosis gondii parasite. Toxoplasmosis infections are also one of the risk factors for schizophrenia. Fetuses also seem to be at risk of developing the disease if the mother is infected with ANRE during pregnancy—about a seven-fold increased risk for the fetus. Initial symptoms of the disease mimic those of common viral infections and then progress to movement disorders or seizures as well as behavioral symptoms including visual or auditory hallucinations, depression, mania, and more. 

The current course of treatment for ANRE is about 18 months of immunosuppressive therapies including steroids and plasmapheresis, which are used as first-line treatments, and drugs like rituximab and cyclophosphamide which are second-line treatments. About half of patients treated this way recover with some lingering neurological symptoms but are otherwise normal. For patients who don’t respond to treatment, the focus shifts to finding strategies that help them manage their symptoms.  

Prior to selling the asset to Arialys, Astellas Pharma had already done some preclinical studies testing the efficacy of ART5803 in marmosets with very promising results that made it an attractive candidate for Arialys to pursue. 

In their ART5803 studies, Astellas infected marmosets with a cloned human pathogenic antibody from patients with autoimmune encephalitis. Scientists then treated the sick marmosets with the drug, which is a single-arm antibody that binds the same epitope as the pathogenic antibody. Two weeks later, all the infected marmosets treated with the drug had recovered to baseline. Typically, “most CNS drugs take months [but] this worked in a couple of weeks,” Lichter said. Seeing positive results in the marmosets within two weeks was a “profound and significant response. I was blown away.” 

Arialys has since replicated Astellas’ results internally with a different marmoset colony, using different protocols, and a different drug delivery mechanism among other changes. And their results were even more robust. Lichter said that Arialys scientists recorded responses in the test subjects as early as one week post-treatment. “We can now leave stealth mode because we are on the fast track to get into the clinic next year.” The company plans to publish data from its studies in the near future.

In fact, the company plans to begin selecting healthy volunteers for testing in Q4 of 2024, and move on to testing the drug in encephalitis patients in the first half of 2025. And Arialys has secured orphan drug designation from the FDA for ART5803 for treating ANRE.  “Our initial focus is autoimmune encephalitis and that will be the first half of 2025,” Lichter said. “The second half of 2025, we want to do an autoimmune psychosis trial where we are screening schizophrenia patients.” The reason for that second trial is that about 5% of schizophrenia patients have autoantibodies against NMDA receptors that could play a role in their psychosis symptoms. Arialys hopes that ART5803 could help those patients as well. 

Separately, Arialys has an internal discovery program to identify other types of pathogenic autoantibodies and drugs that target them. The company is also developing a backup ANRE treatment that has better brain penetration—that drug has not yet been named. Those studies are occurring in parallel so that by the time the ART5803 clinical trials wrap in 2026, they will have a list of clinical candidates that target a broad range of autoimmune neuropsychiatric conditions. Besides schizophrenia, some research suggests that about 5% each of patients with conditions like dementia, bipolar disease, and severe depression also have autoantibodies against the NMDA receptor. All of those patients could benefit from Arialys’ proposed portfolio adding up to a sizable market for the company.

The post Arialys Therapeutics Raises $58M to Target Autoimmune Neuropsychiatric Diseases appeared first on GEN – Genetic Engineering and Biotechnology News.

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