With a new approach to creating thymus-targeted medicines for autoimmune diseases, Zag Bio has emerged from stealth with the help of backing from pharma giants AbbVie, Regeneron and Sanofi.
The trio are part of an $80 million series A financing round, led by T1D Fund and Polaris Partners, which founded and incubated the Cambridge, Massachusetts, startup.
Zag Bio is part of the industry’s rush to develop regulatory T-cell therapies, also known as Tregs. Zag is setting itself apart, however, with its unique thymus-targeting platform.
"The name Zag Bio shows that we are intentionally moving in a new direction to treat autoimmunity by targeting the natural mechanisms in the thymus," new CEO Jason Cole told Fierce Biotech. "When others in the autoimmune space are zigging, we are zagging."
Cole was most recently the CEO at gene coding specialist SalioGen Therapeutics. He formerly was the chief business officer and chief strategy and financial officer at bluebird bio.
"Despite its integral role in central immune tolerance, the thymus has been inaccessible to drugs of all types.” Cole added in a release.
With its platform, Zag believes it can develop antibodies that deliver antigens to restore central immune tolerance in patients with a variety of autoimmune diseases, including Type 1 diabetes. Zag has a candidate in that indication it hopes to move into phase 1 next year.
In the thymus, the antigens engage the body’s natural mechanism for T-cell tolerance, Zag explained, expanding antigen-specific Tregs while depleting antigen-specific T effector cells (Teff). The thymic Tregs then migrate to diseased tissues to protect them. Thymic Tregs are epigenetically hardwired, Zag added, to be stable and durable, enabling them to reset the immune system.
“Zag Bio is trailblazing an unprecedented therapeutic pathway for medicines to target the thymus, and this positions the company to be an innovator in autoimmune disease treatment,” Alan Crane, a partner at Polaris and co-founder and chairman of Zag Bio, said in a release.
Early this month, three pioneering immunologists were awarded the 2025 Nobel Prize in Physiology or Medicine for their work on Tregs. One of the winners was Japanese scientist Shimon Sakaguchi, M.D., Ph.D., who discovered Tregs in 1995 as the “peacekeepers” of the immune system, protecting against an array of autoimmune disorders.
Three decades later, no therapies are on the market, but it’s just a matter of time as more than 200 clinical trials are underway harnessing Tregs. Orca Bio is furthest along with a Tregs therapy, facing an FDA decision in April for its blood disease candidate Orca-T.
Zag Bio was built on findings in the research lab of Harvard immunology professor and company co-founder Diane Mathis, Ph.D. Other co-founders are Chief Scientific Officer John Kulman, Ph.D., and biotech exec and entrepreneur Jo Viney, Ph.D.
Other companies providing financing aside from the three biopharma heavies are Mission BioCapital, Lightspeed Ventures, KdT Ventures, Boxer Capital and Pear VC.
While the Nobel Prize brought high-profile attention to Tregs, many big companies have been angling to get a piece of the action. In a similar financing arrangement nearly a year ago, Eli Lilly, Johnson & Johnson and Pfizer invested in South San Francisco-based TRex Bio’s $84 million series B round.
Two years ago, AstraZeneca partnered with Quell Therapeutics, paying $85 million to collaborate on Tregs candidates, including one for Type 1 diabetes.