Lycia Therapeutics ($lyca) went public late last month, raising >300mm in the process. The company has three assets: Two for IgE-mediated food allergies (of which one is pre-clinical and the other is phase 1), and one for Graves Disease that’s also phase 1. Data for both phase 1 assets are expected in ’27. The company expects to have sufficient cash to fund operations into 2H29 and get all three assets “substantially through” phase 2 trials.
Lycia’s another player in the protein degradation space, but of a bit of a different sort. While PROTACs and molecular glue degraders focus on proteins found within a cell, Lycia focuses on those outside the cell, using LYTACs (lysosome-targeting chimeras) to do so. The 26S proteasome degradation complex that PROTACs/MGDs take advantage of isn’t used endogenously to degrade extracellular proteins, so Lycia instead leverages lysosomes, another waste-disposal system within cells. LYTACs have two key components: one half (whether that be a small molecule, peptide, or antibody/antibody fragment) binds to the protein of interest, and the other half binds to a lysosome-targeting receptor, a cell-surface protein that will take the complex within the cell (via endocytosis) and to the lysosome for degradation. This workflow isn’t unlike antibody-drug conjugates, where the hope is to leverage a cell-surface protein to trigger endocytosis and bring a payload inside the cell.
There are a few promises of LYTACs:
1) They’re another novel way to hit previously ‘undruggable’ proteins, expanding the druggable universe in a different way than PROTACs and MGDs do.
2) For proteins we can already hit, they offer the potential of greater efficacy/improved tolerability by degrading the protein in its entirety rather than only inhibiting a specific function. Degradation could mean less frequent dosing and reduced side-effects.
3) Lycia will argue LYTACs are a platform modality. The harder part of LYTAC design is targeting an appropriate internalizing receptor. Once that’s figured out, you can swap out the other half of the LYTAC for an antibody/small-molecule targeting the extracellular POI of your choice.
Beyond leveraging an alternate protein-degradation system and targeting proteins outside the cell, there are some other notable departures from PROTACs and MGDs:
1) LYTACs are not a small molecule approach. As a result, arguments about the modality’s convenience focus on reduced dosing frequency rather than the potential for a once-daily pill. This means Lycia is unlikely to be valued like Kymera.
2) The modality is not inherently catalytic. While Lycia’s two food-allergy candidates act catalytically (degrade one protein, then another, then another), its Graves Disease asset acts more like a traditional therapeutic. The company argues this doesn’t matter: different proteins are present at different concentration levels and have different resynthesis rates, so catalytic degraders aren’t necessary for all diseases.
3) There is some debate as to whether LYTACs, like PROTACS, exhibit a hook effect.
The foundational paper on LYTACs was published in 2020, and included future Nobel Prize winner (and Lycia co-founder) Carolyn Bertozzi as an author. The paper’s focus was two-fold: demonstrate that a lysosome targeting receptor could be used to drive cellular uptake of targeted extracellular/cell-surface proteins, and demonstrate that LYTACs could be used to degrade extracellular and cell-surface proteins. The authors chose the cation-independent mannose-6-phosphate receptor (CI-M6PR) as the lysosome targeting receptor, on the basis that many enzyme replacement therapies for lysosomal storage disorders (think Pompe or Fabry Disease) use this same. While there’s still work in the field that targets CI-M6PR, Lycia and other developers often now use the asiaglycoprotein receptor (ASGPR).1 This receptor is solely expressed on liver cells (unlike CI-M6PR which is expressed everywhere), and has been leveraged in approved siRNA/ASO therapeutics. Like the world of PROTACs/MGDs, companies in this space emphasize the potential to develop tissue-specific therapies by using different LTRs.
This foundational paper was predominantly focused on cell-surface/transmembrane proteins, looking at degradation of EGFR, PD-L1, and integrins (in other words, targets valuable in the cancer context). It did also look at degradation of Apoe4, an extracellular protein implicated in Alzheimer’s Disease. Lycia has moved away from cancer/Alzheimer’s targets, and away from cell-surface/transmembrane proteins.
Lycia’s Graves Disease candidate is technically furthest along in development, but the company’s S1 filing is essentially an apology for the promise of its IgE degraders.2 There’s good reason for this: Xolair is an FDA approved IgE inhibitor, and is a fairly classic pipeline in a product. It’s approved across four indications: IgE-mediated food allergies, moderate to severe allergic asthma, chronic spontaneous urticaria, and chronic rhinosinusitis with nasal polyps. Put differently, Lycia is arguing not only that it’s a platform, but also that its IgE candidates can be approved across multiple different indications, starting with food allergy. Xolair did ~5.57bn in worldwide 2025 sales (split between Genentech and Novartis), with almost 4bn of that in the U.S. The therapeutic lost exclusivity in late ’25, and only received its food allergy approval in February ‘24. The food allergy launch was extremely successful, as Lycia notes:
“Xolair has seen rapid adoption after its 2024 U.S. Food and Drug Administration (FDA) approval for the treatment of IgE-mediated food allergy, with its food allergy launch outpacing the Dupixent and Skyrizi launches in atopic dermatitis and plaque psoriasis, respectively. By 2025, over 100,000 food allergy patients in the United States were prescribed Xolair, contributing to U.S. annual sales of over $4 billion” (Note: I don’t think that above 4bn number is quite right).
This speed of patient uptake is impressive, particularly given prior authorization requirements. If the food-allergy approval hadn’t come so late, Xolair would have done billions in sales for this indication alone: food-allergy impacts ~10% of the U.S. population, and ~40% of that population will visit the emergency department for their food allergy at some point in time. The Skyrizi mention is important, because it entered the market when there were already multiple approved plaque psoriasis options. Given the clinical trial landscape, I think part of the pitch Lycia wants to make is the food-allergy market can support more than one winner.
Xolair’s not perfect, and it wasn’t effective for everyone in its pivotal OUtMATCH trial. 67% of the experimental arm met the primary endpoint (so 33% did not), there was large variability in patient responses, and there’s at least some portion of the food-allergy population (although maybe not in the 20-30% range that Lycia cites) whose IgE levels are too high to be a Xolair candidate. Moreover, dosing is based on weight/baseline IgE levels, which isn’t necessarily ideal. Zepbound and Wegovy wouldn’t have done as well if dosing levels needed to be individually calculated for each patient.
It’s worth taking a step back to explain what goes on with IgE-mediated food allergies. These allergies begin when a person’s immune system starts producing IgE antibodies specific to a certain food. IgE, however, isn’t the most important part of the allergic reaction. This IgE binds (with extremely high affinity) to FcεRI, a cell-surface protein expressed on mast cells and basophils. It is these cells that cause the reaction. A patient ingests a peanut, and then this peanut protein binds to two adjacent FcεRI-bound IgE antibodies (a process called cross-linking). This cross-linking of bound IgE antibodies is what initiates the allergic reaction.
In other words, it’s the bound IgE, rather than the free IgE, that causes the problem. This presents an issue, because IgE binds to FcεRI with picomolar affinity.3 Fortunately, there is a workaround. FcεRI cell-surface expression on basophils and mast cells is highly dependent on IgE expression. If IgE isn’t binding to FcεRI, expression becomes increasingly downregulated. Consequently, strategies that dramatically reduce the amount of free IgE will, over time, reduce the FcεRI expression levels on mast cells and basophils. I say over time because bound IgE has a longer half-life than free IgE. A free IgE reduction is a leading indicator that a patient’s allergic response will dampen over time, but you need bound IgE to break down before FcεRI expression levels can be affected.
This is exactly what Xolair does. It dramatically reduces the amount of free IgE in circulation (as that free IgE is now bound to Xolair), and so in turn reduces FcεRI mast cell/basophil expression. The lower this FcεRI expression, the fewer IgE antibodies that are bound to mast cells/basophils, and the lower the intensity of the allergic reaction.
As you might expect, Lycia’s candidates aim to degrade IgE rather than only inhibit it. There are a few hoped for benefits: it should result in better free IgE clearance (including in those patients whose IgE levels are too high for Xolair), knocks out any and all IgE protein function, and its catalytic MoA could eliminate weight-based dosing and reduce dosing frequency. In sum, you’d have a drug that’s both more effective and more convenient.
The company’s preclinical data includes figures on free IgE and total IgE levels, basophil FcεRI expression, and surface IgE levels on basophils and mast cells. Comparisons were made against:
· Xolair (omalizumab)
· Ligelizumab, which was developed by Novartis as an improved version of Xolair but discontinued due to lack of differentiated efficacy.
· Ozureprubart, the late-stage asset GSK spent 2.2bn on Rapt Therapeutics to acquire.
These comparisons (and lack of other comparisons) are quite instructive for understanding the allergy space. Ligelizumab was pitched as a much higher affinity version of Xolair, and so the hope was it would drive higher efficacy across various indications. Even with these advantages, it didn’t succeed against Xolair in phase 3 trials for chronic spontaneous urticaria, and the pivotal food allergy trial was stopped early due to lack of superior efficacy against Xolair. There are various theories for why this happened, but one possible reason is the increased magnitude of IgE lowering and surface IgE expression on mast cells/basophils just wasn’t enough to drive greater efficacy. I mention this because this therapeutic space is not as simple as increased lowering = better results. Rapt’s ozureprubart is an apt comparison, as it’s currently in phase 2b trials for food allergy, and aims to be a more potent, longer lasting IgE inhibitor. Assuming ozureprubart has better results than omalizumab, it will become the new standard for IgE-targeting therapeutics.
Notably, Lycia Therapeutics’ preclinical data package does not include a comparison against Excellergy’s Exl-111. Data for Ex-111 wasn’t released until February, so there’s no reason to think it would have been tested by Lycia preclinically. That said, Exl-111’s preclinical data is extremely good, and is probably the new standard to beat. Excellergy’s candidate is a monoclonal antibody that it terms an “allergic effector cell response inhibitor” (ECRI). It acts in three ways:
1) Removes IgE already bound to allergic effector cells without triggering activation
2) Neutralizing free IgE
3) Driving rapid receptor down-regulation to effectively control allergic sensitivity.
All IgE-focused candidates do (2) and, to some degree, (3). What they don’t do is (1). Historically, the focus has been on inhibiting free IgE because there was a concern that trying to remove bound IgE would accidentally cross-link these IgE antibodies. Instead of preventing an allergic reaction, accidental cross-linking would cause one. If you can disrupt already bound IgE, however, this is clearly the ideal approach. Bound IgE is what actually causes the allergic reaction, and so removing that (rather than waiting for the antibody to naturally degrade) should lead to a faster therapeutic onset.
Interestingly, Excellergy’s work seems to be informed by the observation that, at very high (above therapeutic) doses, omalizumab actually does facilitate bound IgE dissociation. From there, researchers engineered omalizumab variants with the hope of discovering something much more disruptive to bound IgE. The results are pretty striking. In NHPs, Lycia’s candidate demonstrated a 50% reduction of FcεR1 expression on circulating basophils. Excellergy’s candidate showed a reduction of 95%, and a greater than 99% removal of receptor-bound IgE from basophils (Lycia didn’t publish this figure for NHPs). Big pharma took notice of this data, and Novartis spent 900mm upfront (with a potential 1.1bn in milestone payments) to buy Excellergy in March.
It’s challenging to get all that comfortable with a peak sales estimate for Lycia’s allergy candidates given the existence of Excellergy. Both companies are at roughly the same stage, and so Lycia doesn’t benefit from a first to market advantage. It could be that Lycia has some dosing/convenience advantage, although both Excellergy and Rapt’s candidates are also aiming for better dosing than the Xolair schedule. The best argument(s) for the supremacy of Lycia’s candidate is that maybe there’s an underappreciated benefit to completely removing IgE, something that Excellergy is not aiming to do. Moreover, maybe the catalytic MoA means the side-effect profile is extremely benign, and Exl-111 ends up struggling here. All that said, I think it’s tricky to appropriately value Lycia’s allergy work unless Excellergy stumbles.
Disclaimer: The information in this post is not intended to be and does not constitute investment or financial advice. You should not make any decision based on the information presented without conducting independent due diligence.
There are some private companies that don’t technically term themselves Lytac platforms but are doing the same thing. Avilar Therapeutics has an MTAC platform and an ATAC platform. The MTAC platform leverages lysosomal degradation via M6PR; the ATAC platform leverages lysosomal degradation via ASGPR. EpiBiologics’ work is a bit broader, but two of their three extracellular/cell-surface protein degradation strategies are using lysosomal degradation.
Lycia’s Graves Disease candidate could end up having real value. There’s a lot of phase 1 work going on for Graves, most of it with the aim of precisely hitting the disease. Immunovant (a Roivant subsidiary) is further along relative to these phase 1 players, but its candidate lowers IgG broadly and so is pretty clearly a blunt approach. IgG suppression also tends to be immunosuppressive, although this is something Immunovant is working to avoid via sparing IgG3.
This is also part of why targeting Ras in the cancer context is so hard. Ras binds to GTP and GDP with picomolar affinity, and so even if you could design a drug to inhibit that site directly you’d need ridiculously good binding affinity.