Dog Longevity Startup Loyal Secures $45 Million in Funding

Bain Capital Ventures led the Series B financing, with participation by new backer Valor Equity Partners, as well as returning investors Khosla Ventures, First Round Capital and others. Bain Partner Kevin Zhang has joined Loyal’s board. Bridge Bank, part of Western Alliance Bank, has also provided a $12.5 million line of credit to the company.

Loyal’s valuation increased, said founder and chief executive Celine Halioua, but she declined to comment on specific figures. Research firm PitchBook Data put the San Francisco startup’s valuation in its prior round in 2022 at $220 million.

Halioua said the financing process began after the Food and Drug Administration’s Center for Veterinary Medicine in November deemed Loyal’s LOY-001 drug program to have a “reasonable expectation of effectiveness."

Loyal, which is incorporated as Cellular Longevity, aims to become an independent pharmaceutical company and a consumer brand selling treatments for animals.

Biotech startups developing human medicines with early positive data typically partner with large pharma for distribution and manufacturing, said Robert Schultz, an assistant professor of entrepreneurship at Babson College. “Small companies don’t have the runway or the expertise to do that on their own," he said.

Halioua said that, “We haven’t really raised from traditional East Coast biotech funds. We have a very different business model and a different go-to-market." She noted Loyal’s board includes members with biotech expertise, such as Stephen Betz, chief scientific officer at Crinetics Pharmaceuticals, who is a board observer.

Loyal believes it can remain stand-alone because the cost of bringing veterinary drugs through regulatory approval is lower, Halioua said. Additionally, dogs have shorter lifespans, which means finding an effect on mortality risk could be faster. Loyal has raised more than $125 million since its founding in 2019.

Loyal’s LOY-001 drug molecule, an injectable for large breeds, aims to reduce circulating levels of GH/IGF-1, a hormone that drives some larger dogs to grow rapidly in puberty and may reduce expected lifespan.

The company is conducting a double-blind study on another molecule, called LOY-002, a daily pill to improve age-related metabolic decline in senior dogs for all but the smallest breeds. Loyal hopes to bring it to market first, in 2025.

“Our clinical study is modeled on the assumption of approximately one year of healthier life," Halioua said about the drug’s potential effect. However, she cautioned there is no data yet to quantify that. Loyal hopes its drugs extend the healthy years of dogs as measured by quality of life and frailty surveys.

After FDA approval, Loyal would start generating revenue by selling its drugs through veterinarians. The sales pitch to consumers likely won’t be difficult, because they make emotional decisions, but Loyal will need to convince veterinarians to write prescriptions, Schultz said. “It’s not something that the veterinarian will say, you need this. It’s, do you want this?" he said.

Halioua said there are many examples in the pet space where dog owners spend considerably on pet health, such as for premium dog food brands and pricey preventive medicine to ward off heartworm, fleas and ticks.

“That said, it’s a new category. We’ll have a slower ramp than a new flea and tick might," Halioua said.

Loyal is one of several biotech startups aimed at slowing aging broadly, rather than targeting specific diseases. Longevity Fund, a venture firm focused on longevity, is an investor in Loyal. Firm founder Laura Deming recently co-founded another firm called Age1 with a similar thesis.

While longevity is a promising area of research, it is also challenging, since no longevity drug for any species has yet been approved. Recent studies, for example, cooled enthusiasm in the human longevity space for the drug metformin’s ability to extend lifespan.

Generally, the idea that slowing aging could reduce the incidence of disease makes sense, said Adam Boyko, an associate professor at the College of Veterinary Medicine at Cornell University and co-founder of Embark Veterinary, a canine genetic testing company.

“If you can make your body 10 or 20 years younger or make your dog three or four years younger, you protect it from lots of different diseases," Boyko said. Still, he said, evolution has optimized how different species age and disrupting that could create unintended consequences.

Write to Yuliya Chernova at yuliya.chernova@wsj.com