San Francisco-based Alector’s research focuses on eradication of brain plaque by immune system

A promising new avenue in Alzheimer’s research that focuses on the eradication of brain plaque by the immune system has become the first investment for a $100 million fund dedicated to delivering new dementia drugs within a decade.

The Dementia Discovery Fund, set up last year with backing from the U.K. government and several of the world’s biggest pharmaceutical companies, has led a $29.5 million investment round to back research under way at San Francisco-based Alector LLC.

The fund aims to launch at least one breakthrough dementia treatment by 2025, and forms part of U.K. Prime Minister David Cameron’s efforts to address what he called a “market failure” in the area.

Alector is developing drugs to address what its founders believe could be the root cause of dementia: a failure of the immune system to clear plaque from the brain. It was founded in 2013 to hunt down potential drug targets based on new research linking several genes to the likelihood of developing Alzheimer’s. Alector’s founders then discovered that two-thirds of all genes associated with Alzheimer’s were involved in immune-system function.

“We realized we were on a treasure trove of targets here,” said [Dartmouth engineering professor] Tillman Gerngross, one of the co-founders. “The science is going full hog and we’re working on 10 to 12 programs so we have enough data to decide which ones to take forward,” he said, adding that the most advanced program could start human trials within two years.

The approach sets Alector’s research efforts apart from others in the pharmaceutical industry, most of which center on attacking the plaque-forming protein itself using a class of drugs known as BACE inhibitors.

This distinction has helped Alector attract plenty of attention from the drug industry already. Before the latest investment, it had raised a total of $48 million in three previous funding rounds, including one led by the venture-capital arm of Merck & Co., according to Dr. Gerngross. Still, he said the involvement of the Dementia Discovery Fund would increase the company’s visibility thanks to the involvement of the U.K. government.

Kate Bingham, management partner at SV Life Sciences, the group that is managing the Dementia Discovery Fund, said she chose Alector as the first investment because of the strong track record of the management team. Dr. Gerngross and Arnon Rosenthal, two of the three co-founders, had previously founded successful portfolio companies for earlier SV Life Sciences funds.