West Coast Editor
Aiming to profit from the next step in RNA interference is Cequent Pharmaceuticals Corp., which last week closed a $9 million Series A financing, including an equity investment from the recently established Novartis Option Fund.
"We have $9 million in the bank [$3 million of that from Novartis], but all of the first-closing investors are committed to add another 50 percent of their original investment" when Cequent files its first investigational new drug application, said Peter Parker, president and CEO of Cambridge, Mass.-based Cequent. That filing will take place "hopefully, next year," he said.
Ampersand Ventures, Nexus Medical Partners and Pappas Ventures opened the round in November, and asked Cequent to keep the round open so another fund could come aboard.
Novartis AG, of Basel, Switzerland, set up the $200 million option fund to provide cash as part of deals that give the pharma giant an option to specified programs. In the case of Cequent, Novartis is getting an option for an inflammatory bowel disease program based on tkRNAi. Officially, the option is a separate deal.
"They go hand in hand," Parker told BioWorld Today. "If the option fund had not also bought an option, [Novartis] would probably have kicked it over to the venture-fund department." Such funds managed by Novartis involve more than $550 million in committed capital overall, with money in more than 50 private companies. Steven Tregay, managing director of the Novartis fund, is joining Cequent's board.
"We wouldn't have done this deal with Novartis if we didn't think we'd partner with someone down the road," Parker said, adding that Novartis would be the ideal partner for the IBD compound.
In June, Charlottesville, Va.-based Adenosine Therapeutics LLC drew the first investment from the option fund, in a deal that included an option to technology targeting the adenosine A2B receptor. The fund was the lead investor in Adenosine's Series C financing, the first closing of which totaled $8 million. (See BioWorld Today, June 19, 2007.)
Cequent, with 18 employees, was established last year on work done at Beth Israel Deaconess Medical Center, where scientists engineered nonpathogenic bacteria to make RNAi that are released after the bacteria are given orally or intravenously, then degraded by host cells without adverse effects. The process is called Transkingdom RNAi, or tkRNAi - since bacteria and humans represent differing kingdoms - and was the subject of a paper published in Nature Biotechnology in May 2006.
The company's lead compound is not for IBD but for familial adenomatous polyposis (FAP), an inherited colorectal cancer syndrome that accounts for 1 percent of all cases of the disease.
"People get hundreds of polyps in their colons because they have a genetic deficiency, and all get their colons removed at 18 to 20 years old," Parker said, estimating that about 1,000 patients are diagnosed per year. The tkRNAi compound "has a chance to postpone the inevitable" and has worked every time in APC gene knockdown mice.
IBD, of course, is a much larger market. "The last survey I saw said $12 billion, when you consider Crohn's disease and colitis," Parker said. "They're very similar. It's quite possible that one medication might be useful for both."
Cequent also is trying a preventative drug for cervical cancer. That effort is "a little behind the IBD program," and except for the FAP compound, everything in the pipeline is "two to three years away from an IND, at least."
Others in the FAP space include TopoTarget A/S, of Copenhagen, Denmark, which has the histone deacetylase inhibitor Savicol in pivotal Phase II trials, which are expected to yield data in the fourth quarter of this year. Savicol delivers valproic acid in mini-tablet form, and has been granted orphan drug status in the U.S. and Europe.
South San Francisco-based Genentech Inc. earlier this month published a paper in the online Proceedings of the National Academy of Sciences, reporting that anti-VEGF antibodies reduced the size, though not the number, of benign or pre-malignant tumors by roughly 75 percent after three to six weeks of treatment.