Former Teva Executives Raise $60 Million for Metabolic Disorders Venture

89Bio Ltd., a biotech company incorporated in Israel in January, announced the closing of a $60 million series A on Thursday. The investment was led by New York-based healthcare investment firm OrbiMed Advisors LLC and its Israeli venture arm, who founded the company, and Menlo Park-based Longitude Capital Management Co. LLC. Boston-based RA Capital Management LLC and Israel-based venture capital firm Pontifax Ltd. also participated.

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Based in central Israeli city Herzliya and in San Francisco, clinical-stage 89Bio develops treatments for liver and metabolic disorders. The company’s pipeline of biologic and small molecule drug candidates was acquired from Teva Pharmaceutical Industries Ltd. Formerly a program manager at Teva, Michal Ayalon is 89Bio’s head of research and development. The company’s chief operating and business officer, Ram Waisbourd, also hails from the Israeli-American pharma company.

Michael Hayden, who served as Teva's president of global research and development and its chief scientific officer until December, is joining 89Bio as a founding board member following the round.

Bio89 is one out of several companies that have been launched in recent years by former Teva managers. The generic pharma company, one of the largest in the world, has its roots in the early 20th century in Israel, and the company is still managed from Israel where it has several facilities and employs thousands.

A downturn in the prices of generic drugs in the U.S., and a series of acquisitions and business missteps have plunged Teva into a heavy-debt over the past two years, sinking its stock price. In December 2017 the company announced a cost-cutting reorganization, after appointing a new CEO.

89Bio has recently launched a phase 1 clinical trial to test BIO89-100, formerly Teva’s TEV-47948, as a candidate for treating nonalcoholic steatohepatitis (NASH), a type of nonalcoholic fatty liver disease.