Latest Astellas, Drais Spinout, Tacurion Launches with $15M
By Catherine Shaffer
Astellas Pharma Inc., of Tokyo, and Drais Pharmaceuticals Inc., of Bridgewater, N.J., will repeat for the third time a spinout maneuver that has been successful with two other programs in the past. The companies partnered to develop and commercialize Astellas's compound ASP7035, a vasopressin V2 receptor selective agonist in development for nocturia, by means of a licensing arrangement to a new virtual company, Tacurion Pharma Inc., to be managed by the Drais executive team.
InterWest Partners, Sutter Hill Ventures and Astellas Venture Management LLC will invest a total of $15 million into Tacurion to provide a runway for ASP7035.
Drais CEO Donna Tempel told BioWorld Today: "The deal structure was created to offer all parties the simplest possible exit, designed to fit several potential scenarios. . . . At Drais, we believe this model of 'virtual spinouts' could be used broadly by other pharmaceutical companies looking to rapidly advance compounds in their pipelines by taking advantage of outside resources."
For investors, that structure offers a de-risked, compound-specific investment, with the promise of a straightforward exit in the future, according to Tempel.
Tacurion will be responsible for the development, manufacturing and commercialization of the compound in exchange for milestone payments and royalties paid to Astellas. Astellas also will have an option to acquire Tacurion upon successful completion of a proof-of-concept study, planned for the third quarter of 2013.
Astellas and Drais have pulled off the same maneuver twice before. In April 2012, Astellas transferred ownership of ASP3291, a melanocortin receptor agonist for ulcerative colitis, to Telsar Pharma Inc., with a $14 million investment by InterWest and Sutter Hill, to begin Phase IIa testing. (See BioWorld Today, Nov. 1, 2013.)
And in June 2012, Drais partnered with Astellas a second time to develop and commercialize ASP7147, a bombesin BB2 receptor antagonist, for irritable bowel syndrome with diarrhea, through Seldar Pharma Inc. That company received a $13 million investment from Astellas Venture Management LLC, InterWest and Sutter Hill.
Drais partnered with Astellas in 2012 in a risk-sharing arrangement in which the large pharma divests compounds from its pipeline into individual companies, then forms exclusive relationships with Drais to move the drugs into development.
The money raised can then go into each new company, potentially attracting venture capitalists with specialty interests in some therapeutic areas.
Drais then is also able to partner or sell individual assets more easily to Astellas or a third party without the added complication of other compounds in the pipeline.
Drais isn't biotech's first dedicated drug development company. Others include Furiex Pharmaceuticals Inc., of Morrisville, N.C., which PPD Inc. spun out in 2011, and Flexion Therapeutics Inc., of Woburn, Mass., founded by veterans of Eli Lilly and Co.'s Chorus division to advance abandoned early clinical programs through proof of concept. (See BioWorld Today, Feb. 1, 2010, and July 28, 2011.)
The $15 million investment in Tacurion will support a Phase II proof-of-concept trial for the drug that should take 18 months to two years to complete.
For Drais, the preferred plan for the compound when it reaches the later stages of development would be for Astellas to exercise its option to buy the compound back. "If it doesn't go back to Astellas, we would explore other partnerships or an acquisition," Tempel said.
There currently are no approved therapies for nocturia, the need to get up in the night to urinate. Desmopressin is approved for nocturia in other parts of the world, and the market for nocturia is believed to be very large.
In 2011, Vantia Therapeutics Ltd. raised £4 million (US$6.4 million) to advance its two Phase II products, one of which is a vasopressin agonist in development for nocturia. (See BioWorld Today, July 13, 2011.)
And nocturia was the subject of a major licensing deal between Allergan Inc., of Irvine, Calif., and Serenity Pharmaceuticals LLC, of Milford, Pa. Allergan acquired worldwide rights to Ser-120, which targets a receptor in the kidney to reduce the volume of urine output, for $43 million up front and up to $122 million in milestones, plus royalties, for worldwide rights in all indications except pediatric bedwetting. (See BioWorld Today, April 2, 2010.)
In other financings news:
Portola Pharmaceuticals Inc., of South San Francisco, set the price range for its proposed initial public offering (IPO), aiming to sell 6.9 million shares priced between $13 and $16 each. At the midpoint range, proceeds would total about $100 million. Portola, which seeks a listing on Nasdaq under the ticker "PTLA," filed for the IPO last month, with funds expected to support its pipeline of drugs for thrombosis, other hematologic disorders and inflammation. (See BioWorld Today, April 16, 2013.)
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