There’s a SPAC, expanded FDA approval, more of the common, and two Bs, two As
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Life Science Today is your source for stories, insights, and trends across the life science industry. Expect weekly highlights about new technologies, pharmaceutical mergers and acquisitions, news about the moves of venture capital and private equity, and how the stock market responds to biotech IPOs. Life Science Today also explores trends around clinical research, including the evolving patterns that determine how drugs and therapies are developed and approved. It’s news, with a dash of perspective, focused on the life science industry.
Welcome to Life Science Today, your source for stories, insights, and trends across the life science industry. I’m your host, Dr. Noah Goodson. This week, there’s a SPAC, expanded FDA approval, more of the common, and two Bs, two As.
The views expressed on Life Science Today are those of the host and guests. They do not necessarily reflect the opinions of any organizations with which they are affiliated.
ZyVersa $109M SPAC
ZyVersa is going public through a $109M SPAC. This deal is surprising in its mechanism of action as well as the total capital raised. As you may recall from 2020 and 2021s special acquisition company flurry, a large number of the deals were 100s of millions and many passed a billion dollars in the biotechnology space. To put some data to the volume and scale, and there are range of sources here, but going from CB Insights, there were 300 SPACs funded at more than $82B in Q1 of 2021, and just 65 deals at $8.5B in Q1 2022. That is an 80% cut in number and 90% in value. By basic math each individual deal is on average half the size. Data suggests there were even fewer in Q2. These changes come from regulators as well as market shifts. I think the general consensus is that hundreds of companies going rapidly public through SPACs is probably sub-optimal for long-term market stability, but they still have an appeal to biotech companies who don’t want to place a hold on critical activities when going through the long capital raise process.
ZyVersa itself is a clinical stage biotech company with one renal candidate in phase 1 studies and a few other targets in the pre-clinical stage. Based on their overall phase of pipeline this is a fairly modest raise with company expected to bring in just $83M after closing – a sizable sum in any industry but biotech.
FDA Approves Expanded Indications for Incyte
Incyte Corporation earned expanded FDA approval for their JAK1/JAK2 inhibitor cream sold as Opzelura. The expanded approval allows for treatment of the autoimmune mediated disease Vitiligo, which causes the death of pigmented cells in areas of the skin. The cream was approved to treat Atopic Dermatitis last September. The FDA delayed the Vitiligo approval in mid-March of this year, but it has now cleared. With a new approval in hand, Incyte hopes to expand to additional conditions including hand eczema and pediatric dermatitis pending the results of pivotal studies. The active ingredient, ruxolitinib, is the same as in Incyte’s leading multi-billion-dollar medication Jakafri. There have been a range of new therapeutics emerging for autoimmune mediated skin conditions recently, so Incyte’s Opzelura finds itself among an increasingly crowded field. Incyte appears optimistic that the JAK inhibitor sales could eventually reach as much as $1.5B/year. This latest approval should help keep them on track.
Revolution Medicine Raises $230M in Common Stock
Last week we noted that Pliant Therapeutics raised $200M in an oversubscribed common stock offering. This buoyed their overall stock and allowed them to reset with some capital for the next phase of development. In a remarkable similar story, Revolution Medicine’s has raised $230M at $20/share in a common stock offering. The oncology biotech has raised the money to advance their RAS inhibitor portfolio which includes 3 phase 1 candidates and a phase 2 candidate in partnership with Sanofi. Their stocks have almost moved up on post-offering. These raises may result in some value dilution, but for biotech’s who need capital to continue clinical development, options may be thin on the ground. The positive new in both these stories is the offering did tank their overall stock prices.
2 Series B, 2 Series A
There were several funding rounds worth noting last week.
First up, Frontera Therapeutics has announced a $160M series B. The company, based in both the US and China has simultaneously announced the FDA acceptance of their IND for first-in-human studies of their leading gene therapy candidate. The therapy is based off of their APEX platform for AAV associated gene therapies. I should note here that their first IND is actually targeting Leber’s congenital amaurosis, which is a rare degenerative retinal disease. This would not be strange, except there is already a gene therapy for the exact same condition sold as Luxturna by Spark Therapeutics. Like most gene therapy companies, Frontera is likely going try and mix in a platform with a broad pipeline to attract co-development partners to drive forward a range of therapeutics. And while their pipeline is early stage with a lead candidate that already has a gene therapy, it may result in an expedited pathway to approval thereby validating their larger pipeline. For now, $160M is a quite respectable series B in this market.
CAMP4 Therapeutics has raised a $100M series B, just a year after their $45M series A. Their platform is focused on RNA regulation, which is the relatively biologically fraught field of attempting tune up or down protein expression by targeting the RNA rather than the DNA. There are a lot of reasons this strategy can be useful, for example it’s theoretically tunable and reversible. It also may allow access to certain conditions where gene therapy is not a pragmatic approach to protein expression. These funds will be used by CAMP4 to continue developing the pre-clinical platform.
ForSight Robotics has raised a $55M series A to develop a fully robotic cataract surgery. With 28M procedures a year globally, cataract surgery represents the leading ocular surgery. This is a common, direct, and well understood surgical proceedure. Automated robots doing eye surgery sounds both very cool and a thing of the future. But with a solid opening salvo, ForSight is looking to the future.
Auron Therapeutics has raised a $48M series A to drive forward a pipeline pooled straight from a pitchdeck, including the words novel oncology, machine learning, multi-omics, and the all-important key word: platform. Now lest it seem like Auron is another basically indistinguishable-on-the-surface oncology biotech, I should note they are taking a specific approach around oncology cell differentiation to target specific pathways and slow cells ability to divide. They’re planning to do this using some top-down machine learning approaches. It’s hard to say how much under-the-hood development there is, but I would call this a truly early-stage biotech venture.
Thanks for joining me for Life Science Today, your source for stories, insights, and trends across the life science industry. Learn more at LifeScienceTodayPodcast.com. If you like what you hear, please tell a friend. Once again, I’m Dr. Noah Goodson, I’ll see you next week.