Diagonal Therapeutics announced it has raised $125 million in an oversubscribed Series B financing to advance its lead program, DIAG723, a first-in-class “clustering antibody” designed to correct dysregulated receptor signaling implicated in hereditary hemorrhagic telangiectasia (HHT) and pulmonary arterial hypertension (PAH). The Watertown, Massachusetts-based biotech said the round was co-led by Sanofi Ventures and Janus Henderson Investors and will also support the expansion of its broader clustering-antibody pipeline.
New investors in the financing include Deep Track Capital, EcoR1 Capital, Logos Capital, Balyasny Asset Management and Woodline Partners. Existing backers participating in the round include Atlas Venture, BVF Partners, Lightspeed Venture Partners, RA Capital Management, Frazier Life Sciences, Viking Global Investors, RV Invest, Velosity Capital, Biovision Ventures and Checkpoint Capital.
As part of the Series B, Paulina Hill, Ph.D., a partner at Sanofi Ventures, will join Diagonal’s board of directors.
The company said it expects DIAG723 to enter the clinic in the first half of 2026, with a first-in-human study planned initially in HHT patients. Diagonal positions DIAG723 as a disease-modifying approach aimed at addressing the root cause of both disorders by restoring ALK1 signaling in endothelial cells, which the company says is impaired due to genetic mutations that disrupt receptor function.
Diagonal said DIAG723 has shown disease-modifying activity across multiple preclinical models of HHT and PAH, including prevention and reversal of disease pathology, as well as restored signaling in cells derived from patient donors. The company noted that DIAG723 has received orphan drug designation from both the U.S. Food and Drug Administration and the European Medicines Agency for the treatment of HHT.
HHT is a rare disease that Diagonal said affects more than 330,000 people in the U.S. and EU and currently has no approved therapies. The disorder is characterized by abnormal, fragile blood vessels prone to rupture and bleeding, which can lead to chronic anemia and severe complications such as stroke, heart failure, and hemorrhage. PAH, meanwhile, is a progressive and potentially fatal condition affecting an estimated 200,000 patients globally, where impaired signaling contributes to vascular hyperproliferation and elevated pulmonary arterial pressure.
Diagonal said its broader platform, the DIAGONAL Product Engine, combines computational and experimental techniques to help overcome challenges in antibody drug discovery and generate optimized therapeutic candidates. Beyond DIAG723, the company is pursuing additional clustering antibodies across hematology, hepatology and nephrology indications.
KEY QUOTES:
“DIAG723 has exhibited robust disease-modifying activity in several preclinical models of HHT and PAH, demonstrating its ability to prevent and reverse disease pathology and restore normal signaling in cells derived from patients. We are deeply grateful to our new and existing investors for their support as we advance DIAG723 into the clinic, with the goal of delivering a life-changing therapy for patients in need of effective treatment options. This financing also enables us to advance our pipeline of additional clustering antibody therapeutics.”
Alex Lugovskoy, Ph.D., Founder and CEO, Diagonal Therapeutics
“Diagonal’s unique clustering antibody approach has the potential to address the root cause of genetic diseases that originate from impaired receptor signaling. We are excited to support this innovative company led by an experienced team with a strong track record of operational excellence, deep commitment to improving patients’ lives, and bold vision for transforming care in severe genetic diseases.”
Paulina Hill, Ph.D., Partner, Sanofi Ventures
