Zavante Therapeutics Inc. closed a $45 million series A with the goal of moving its broad-spectrum intravenous (I.V.) antibiotic candidate, ZTI-01 (fosfomycin for injection), into a single pivotal U.S. trial to treat complicated urinary tract infections (cUTI) in the inpatient setting.

The company, formed in 2014, previously raised a $10 million angel round, "which was designed to answer questions we needed to get regulatory clarity" around intellectual property and exclusivity for the asset, explained Ted Schroeder, founder, president and CEO of the San Diego-based company. Those answers came last year, when the FDA confirmed that ZTI-01, previously marketed in Europe, could be advanced swiftly in the U.S. through the 505(b)(2) pathway, giving the company confidence to proceed with an institutional round.

The financing, designed to fund Zavante through completion of the pivotal trial, included $35 million from new investors and $10 million from the conversion of outstanding convertible notes. Frazier Healthcare Partners and Longitude Capital co-led the round, with participation from Aisling Capital. In conjunction with the financing, Patrick Heron, managing general partner of Frazier Healthcare Partners' Life Sciences team, and David Hirsch, managing director and founder of Longitude Capital, joined the Zavante board, with Andrew Schiff, managing partner of Aisling Capital, taking an observer seat.

In the second quarter, Zavante plans to begin enrolling patients in the phase II ZEUS study of ZTI-01, a bacterial cell wall synthesis inhibitor designed to treat multidrug-resistant (MDR) pathogens. ZTI-01 previously showed bactericidal gram-negative and gram-positive activity against a variety of contemporary MDR bacterial strains that have limited antibiotic therapeutic options.

The randomized, double-blind, multicenter trial is expected to enroll 460 patients – 230 in each arm – to compare the safety and efficacy of ZTI-01 against piperacillin/tazobactam (Zosyn, Pfizer Inc.), an injectable beta lactamase inhibitor, in cUTI. Schroeder said he expects the trial to be completed around mid-2017 and is eyeing a regulatory submission in the second half of next year.

In September 2014, the FDA granted qualified infectious disease product (QIDP) designation for the drug in the initial indication of cUTI. In December 2015, the FDA expanded the QIDP designations to include complicated intra-abdominal infections, hospital-acquired bacterial pneumonia/ventilator-associated bacterial pneumonia and acute bacterial skin and skin structure infections and granted fast track designation for all four QIDP designations.

The QIDP designations make ZTI-01 eligible for certain incentives available for the development of new antibiotics, including priority FDA review and five years of additional market exclusivity under the Generating Antibiotic Incentives Now, or GAIN, Act. (See BioWorld Today, June 5, 2014.)

'THE OPTIONALITY IS GOOD TO HAVE'

Fosfomycin has been marketed in Europe for several decades by a variety of companies but not previously in the U.S., according to Schroeder, who said Zavante will rely on previous safety and toxicity data in its filings. He maintained, however, that ZTI-01 is "a completely different class" with "a completely different mechanism of action" in the antibiotics space.

"Other antibiotics in late-stage clinical development all emerged from existing classes," Schroeder told BioWorld Today. "They're either new molecules within those classes, existing molecules with a new inhibitor attached to it or a new molecule with an old inhibitor."

In contrast, the I.V. formulation of fosfomycin disodium is an epoxide antibiotic that acts by interfering with cell wall synthesis at a much earlier step in the peptidoglycan assembly.

"That's important, because it doesn't share any common mechanism with any other antibiotic and it's a target that's only present in bacterial cells," Schroeder explained. "That means you have really good safety and, because of that, you're able to increase the dose. So the change here is modernizing the dose."

Combining good tolerability with a new mechanism of action and "extraordinarily broad spectrum of activity" offers the opportunity to create "a unique antibiotic that can be used either as monotherapy or, for seriously ill patients, in a combination that doesn't share any common mechanisms so you don't induce further resistance," he added.

Frazier Healthcare, which just last week led a $40 million series A to launch another anti-infective effort at Iterum Therapeutics Ltd., got involved with the Zavante story about nine months ago and liked the combination of its seasoned management team and its inpatient product. (See BioWorld Today, March 25, 2016.)

Heron called ZTI-01 an antibiotic with "an incredibly interesting profile of hitting a lot of gram-negative bugs but also having a really broad spectrum across the bugs," including those that are difficult to treat.

In Schroeder and the rest of the management team, Frazier Healthcare saw a leadership team with the chops to manage the asset properly. Schroeder co-founded Cadence Pharmaceuticals Inc. – another Frazier Healthcare-backed firm – in 2004 and served as president and CEO until the company's 2014 acquisition by Mallinckrodt plc for more than $1.3 billion. Frazier Healthcare's Heron and Zavante's Schroeder also served as board members together at several Frazier Healthcare-backed firms. (See BioWorld Today, Feb. 12, 2014.)

Kevin Finney, Zavante's chief operating officer, was vice president and head of corporate development at Allergan Inc., where he oversaw global corporate development strategy, licensing, acquisitions and alliances, including a leading role in the company's acquisition by Actavis plc last year. Cam Garner, a serial entrepreneur who served as a member of the management team at Hybritech Inc. and CEO of Dura Pharmaceuticals Inc. prior to its $1.8 billion sale to Elan Corp., serves as Zavante's chairman. (See BioWorld Today, Sept. 13, 2000, and Nov. 18, 2014.)

"Honestly, a lot of our success has come from selling our anti-infective companies," Heron told BioWorld Today. "But with this team's strength in commercialization, we could commercialize this ourselves with a hospital-based sales force, so there's a dual path for the company, which is also exciting to us."

In the near term, "our first priority is to focus on getting fosfomycin into the market and to patients who desperately need new approaches," Schroeder said. The company will look to its new board members for guidance on advancing ZTI-01 in the additional indications, "and certainly we would be open to discussions about bringing in other products, if it makes sense," he added.

Long term, "we certainly have the capability to build a commercial organization to launch the product, but we would be open to discussions with potential partners," Schroeder said. "The optionality is good to have."