Taking Root: Pelage Pharma’s Hair Regrowth Gambit
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Pelage Pharmaceuticals, a homegrown Los Angeles startup, seeks to revolutionize hair growth
A biotech startup based out of Westwood hopes to have a modern-day solution to an age-old problem: hair loss.
Pelage Pharmaceuticals is preparing for late stage clinical trials on a treatment to regrow hair. It just completed a phase 2 study and the results helped it raise $120 million in venture funding to support late stage clinical trials as it prepares for conversations with the Food and Drug Administration to approve a new treatment aimed at hair growth.
“This represents another way to get at wellness and aesthetics. It is part of how you feel about yourself. That’s become more acceptable to people’s overall health as we spend more time on video calls and social media. It’s heightened awareness of how we look and feel,” said Daniel Gil, chief executive of Pelage. “People recognize that we are bringing something innovative.”
The product that Pelage is developing doesn’t claim to extend a lifespan or cure any disease, but many drugs and treatments have been extremely successful by providing a treatment to a condition that is seen as less than desirable by a society where everybody has a camera in their pocket. The FDA has approved medications for hair growth, but there have been no new treatments approved by that governing body in thirty years. Those that are available are not effective for everyone and may also have side effects. Additionally, a variety of supplements that claim to regrow hair are pitched to consumers without the stringent testing requirements of an approved pharmaceutical.
Pelage had previously raised about $34 million for its Phase 2 study. Based on those results, the company is embarking on a larger study needed to complete its clinical trials. Larger studies require more funding, and so the company raised $120 million in October co-led by ARCH Venture Partners and GV (Google Ventures), with participation from existing investors including Main Street Advisors, Visionary Ventures and YK Bioventures.
“Pelage is a pioneer in the regenerative medicine space, with a scientifically rigorous approach to address hair loss that sets them apart from currently available treatments. This could fulfill an urgent need, as we see a growing portion of the population experiencing hair loss, including women, who only have one FDA-approved option,” said Cathy Friedman, executive venture partner at GV, in a statement.
In conjunction with the financing, Friedman was appointed chair of the board. Additionally, Richard Heyman, venture partner at ARCH joined Pelage’s board of directors, alongside Chief Executive Daniel Gil and William Lowry, cofounder and president of Pelage.
Startup Culture
Many biotech companies use funding to expand operations, with bigger lab space and more staff, but Pelage has remained small. It operates out of a lab on the UCLA campus at the California NanoSystems Institute (CNSI) biotech incubator, which is across the street from where the initial discovery of the reactive molecule was made.
Pelage has about a dozen employees and utilizes a virtual office to stay lean, with Aimee Flores: head of translational sciences and Daniel Sun, PhD: head of chemistry, handling day-to-day operations at the incubator and research associates Tess McDaniel and Laura Flores supporting. Pelage co-founders Heather Christofk, PhD and Michael Jung, PhD, both UCLA professors, work nearby. The company partners with contractors and contract research organizations to preserve flexibility. Gil noted that lab space is expensive and tough to find in Los Angeles.
Many promising drugs have their intellectual property rights acquired by biotech giants in major hubs such as Boston, the Bay Area and San Diego before they reach the point where they require large development and manufacturing operations.
Pelage has a history with the incubator on the UCLA campus that gave it an opportunity to stay. The company was born from technology developed and licensed by UCLA professors. That research demonstrated the possibility of hair regrowth. Gil has a long history of biotech development, having previously worked for Allergan Pharmaceuticals in Irvine for 30 years. He said that his commercial experience empowered him to support his entrepreneurial endeavors.
A Novel Molecule and a Novel Treatment
The molecule that Pelage is developing is named “PP405.” The molecule, which was named as a tribute to the 405 freeway, is applied as a topical gel. It targets a protein in hair follicle stem cells that cause them to go dormant. The medication inhibits the protein and “awakens” the follicle, which then grows hair. Most importantly, that hair is considered to be “terminal” hair which is normal, natural hair, rather than “peach fuzz” growth.
“The [hair regrowth] space has been starving for good science and innovation. We and investors are seeing that,” said Gil. “I don’t fault people for trying to find solutions to take control of their own wellness. That’s what you get when there isn’t a lot of innovation.”
More than half of men and a quarter of women lose hair at some point in their life. The medication has the possibility of hair growth in both men and women who lose hair from a number of different causes such as androgenetic alopecia, a genetic condition known as male and female pattern baldness. It could also work for people that lost hair from chemotherapy.
Powerful Economic Potential
Hair growth is already a multibillion industry. There are two popular drugs that were both developed in the last century on the market, along with a slew of other non-medical treatments and homeopathic treatments spanning generations.
Medically, KilgourMD is trying to develop a scalp care system designed to combat thinning hair associated with menopause. The Sacramento-based company was founded by a Stanford-educated dermatologist and recently closed a Series A round led by Prelude Growth Partners along with participation from existing investors that include Malibu investment firm Willow Growth Partners. It announced that it had sales of $40 million over the past 12 months.
Other options include hair transplant surgery. There are cottage industries in countries such as Turkey that lure people from across the globe with the promise low-cost, outpatient surgical solutions to pattern baldness. Boutiques and plastic surgery centers across Southern California offer similar treatments, albeit at a greater cost.
Regardless of how people are seeking treatment, the economic factors are undeniable. According to GrandView Research, the 2024 market size for hair loss was $1.51 billion, with a projected 2030 spend of almost double, at $2.75 billion.
A Long Regulatory Road
For Pelage, there are many more steps before the product can be commercialized. It needs to undergo more clinical testing, although Pelage expects to have no shortage of candidates to test the product. According to Amiee Flores, clinical trial candidates bombard the company, even finding personal contact information to reach out, which she described as “happily overwhelming.”
The formula would then need to get approval from the FDA and would further need approvals from insurers or enter a cash market for the product.
“Historically, lifestyle products are not covered by most health plans, so the drug would be in the cash market. If there are competitors out there, they set the price, but if you are therapeutically better, you can charge more,” said Geoffrey Joyce, professor and chair of the Department of Pharmaceutical Health Economics at the USC Alfred E. Mann School of Pharmacy and Pharmaceutical Sciences. “Seven out of 10 drugs that come to market don’t even break even after research and development costs. The likelihood of success is slim.”
Nevertheless, there are many examples of lifestyle drugs that demonstrate the potential for a drug with the ability to improve physical appearance and, subsequently, mental wellbeing. Joyce explained that there was initial reluctance to offer GLP-1s, especially by insurers, but competition has brought prices down and demand has been incredibly high.
“If this is significantly better at hair growth, even cash payers will spend substantial amounts. Current treatments are not great – it’s an enormous market,” said Joyce.
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