Diagonal Therapeutics Raises $125 Million to Advance Rare Disease Antibody Pipeline

Diagonal Therapeutics Secures $125 Million for Clinical Rare Disease Program

Diagonal Therapeutics has announced the closing of an oversubscribed $125 million Series B financing round to support its clinical expansion. Co-led by Sanofi Ventures and Janus Henderson Investors, the funding brings the company's total capital raised to over $253 million since its April 2024 debut. This significant investment will primarily fund the transition of its lead program from preclinical research to human trials. The Watertown-based biotech expects to initiate its first clinical study for DIAG723 during the first half of 2026. This lead asset is a first-in-class, disease-modifying antibody designed to treat Hereditary Hemorrhagic Telangiectasia (HHT). The therapy targets the root cause of the disorder by correcting the dysregulated signaling pathways that lead to fragile blood vessels.

Correcting Genetic Root Causes

Beyond HHT, the company intends to develop its pipeline for Pulmonary Arterial Hypertension (PAH), another life-threatening condition involving vascular hyperproliferation. Both diseases currently lack treatments that address the underlying genetic drivers. Diagonal’s approach utilizes a proprietary platform to identify bispecific antibodies that restore receptor function rather than simply blocking signals. The company’s clustering antibody technology solves a historical challenge in drug discovery by artificially activating receptor complexes. By binding and physically pulling receptor subunits together, the platform mimics natural signaling. This mechanism of action could potentially reverse disease pathology in patient populations where traditional inhibitors have failed.

Strategic Growth and Clinical Milestones

Several new investors joined the round, including Deep Track Capital and EcoR1 Capital, alongside strong support from existing backers. As part of the financing, Paulina Hill of Sanofi Ventures will join the Diagonal Board of Directors. This collaboration highlights the growing pharmaceutical interest in precision medicine for rare hematology and vascular disorders. "We are deeply grateful to our investors for their support as we advance DIAG723 into the clinic," said Alex Lugovskoy, Ph.D., Founder and CEO of Diagonal Therapeutics. He noted that the company's bold vision is to deliver life-changing therapies for patients with severe genetic diseases. This financing will also enable the company to advance its pipeline of additional clustering antibody therapeutics.