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A biotech company founded in Wales last year has raised $140mn in its first financing round to develop drugs for severe depression and other brain disorders that have few safe and effective treatment options.
Draig Therapeutics, named from the Welsh word for dragon, was formed by a partnership between Cardiff University’s Medicines Discovery Institute and venture capital firm SV Health Investors. Five other investment funds joined the oversubscribed Series A round.
The funding will enable Draig to move its lead drug candidate DT-101 into the second phase of clinical testing for major depressive disorder this year. The compound, which is a small molecule taken orally, has already completed Phase 1 safety testing in 60 volunteers. Two more Draig drug candidates are due to move into clinical studies in 2026.
“It is incredibly unusual to have scientists in academia building up a clinical stage pipeline of such high quality,” said Kate Bingham, SV Health managing partner. It is notable too that Draig comes from outside the “golden triangle” of Oxford, Cambridge and London where most biotech start-ups are located, she added.
Ruth McKernan, neuroscientist and biotech entrepreneur, is Draig’s co-founder and executive chair. She said the company’s approach was to correct the imbalance between neurotransmitters that excite and inhibit brain activity — a fundamental cause of depression and other psychiatric disorders.
Draig’s scientists, led by professors John Atack and Simon Ward, have designed new molecules to modulate two key neurotransmitters, glutamate and gamma-aminobutyric acid (gaba). DT-101 rebalances brain activity by targeting a specific site on nerve cells.
The company plans to recruit around 300 people with major depression for the phase 2 trial of DT-101, which is due to start this year, and to provide a first readout of clinical data in 2027.
“It is a global study including the UK,” said McKernan.
An important tool in Draig’s research is magnetoencephalography (Meg), a relatively new non-invasive imaging technology that measures magnetic fields created by electrical activity in the brain.
“Meg is quite an advantage, because you can get a sense of what is going wrong in the brain — is it overexcited? is it over-inhibited? — through a functional measurement,” said Bingham.
According to the Brain Health Atlas, depression is among the world’s top causes of poor health, affecting 330mn people — an 89 per cent rise on 1990. Existing drugs, particularly the selective serotonin reuptake inhibitors most frequently prescribed for major depression, have limited efficacy, are slow to act and can have adverse side effects.
Although the pharmaceutical industry is giving depression more attention after many years of neglect, including new treatments based on ketamine and psychedelic drugs, Draig’s investors are backing its more traditional approach to medicinal chemistry.
The five other funds that joined the round are Access Biotechnology, Canaan Partners, SR One, Sanofi Ventures, Schroders Capital and ICG.
Some people in European life sciences lament the fact that US investors dominate the funding of many of the region’s start-ups, which then go on to IPO on the Nasdaq in New York. US-based funds contributed most of Draig’s Series A funding, but Bingham said that did not worry her.
“I think raising money in the States but building them here is just fine because we’re miles away from being able to compete with Nasdaq,” she said. “The way we keep them as UK companies is to capitalise them properly.”
