After flying under the radar for more than a year, Intarcia Therapeutics Inc. is back with a $50 million Series BB round of venture funding.
The Emeryville, Calif.-based company previously raised about $150 million in five venture rounds and tried twice to exit via the public markets, filing for an IPO in 2000 and again in 2005. Both IPOs were withdrawn due to market conditions. (See BioWorld Today, Nov. 7, 2000, and Feb. 8, 2005.)
Intarcia has since "re-focused and re-oriented" itself, according to President and CEO Alice Leung. In a recapitalization, the company's preferred shares issued in the previous rounds were converted into a single new round, dubbed Series AA. The Series BB financing followed, led by new investor New Leaf Venture Partners. Additional participants in the Series BB round included new investor Quilvest Ventures and existing investors New Enterprise Associates, Venrock Associates, Alta Partners, Omega Fund and Granite Global Ventures.
Intarcia's recapitalization and reinvention followed a Phase III failure with lead drug, atamestane. Licensed from Schering AG back in the days when Intarcia was known as BioMedicines Inc., atamestane was an oral steroidal aromatase inhibitor intended to treat breast cancer. But in early 2006, a Phase III program did not meet its primary endpoint, prompting Intarcia to terminate the program.
"It was very disappointing to us," Leung said. A few years before, an oral drug designed to inhibit inflammation caused by chemotherapy had also been scrapped in Phase Ib/II testing.
Fortunately, Intarcia's program using omega interferon to treat hepatitis C virus is steaming ahead, providing the basis for the company's new strategic direction.
According to NIH statistics, only 55 percent of HCV patients achieve a sustained viral response with the current standard of care: a combination of pegylated alpha interferon and ribavirin. Although Genotype 1 virus can be less responsive to treatment by default, some lack of efficacy also can be traced to poor patient compliance due to the side effects associated with the drugs.
To address the compliance issue, Intarcia is using ALZA Corp.'s DUROS drug delivery technology to deliver omega interferon. The DUROS platform is a titanium implant that provides sustained delivery over three months, essentially removing compliance issues from the treatment equation. Leung said the "24/7" nature of the delivery may help avoid the troughs that occur between injections, potentially preventing viral breakthrough.
Intarcia has conducted two Phase II clinical trials with an injectible formulation of omega interferon, both as a monotherapy and in combination with ribavirin. Final data are due to be presented at conferences in the coming months, but initial data indicated that the combination of omega interferon and ribavirin was well tolerated and produced an early viral response rate of 84 percent.
Leung said she is "very confident that we have a very active drug." She added that the data with the injectible formulation provide proof of concept for the molecule and may support a shortened development program with the Omega DUROS formulation, which is slated to begin a Phase Ib clinical trial in the second quarter.
Intarcia and Mountain View, Calif.-based ALZA entered their collaboration for Omega DUROS in 2000. Since then, Intarcia has developed expertise in stabilizing proteins and peptides over a long period of time at a high temperature, as is required for delivery via the DUROS device. "I know of no one else being able to do that," Leung said.
To capitalize on that expertise, last year Intarcia licensed exclusive rights to the DUROS technology from ALZA in all other indications. The only two exceptions are chronic pain and advanced prostate cancer, which already had been licensed.
In pain, Durect Corp. and Endo Pharmaceuticals Inc. are conducting Phase II trials with Chronogesic, which uses the DUROS platform to deliver Sufentanil. In prostate cancer, Bayer Schering Pharma AG markets the FDA-approved, CMS-reimbursed Viadur (leuprolide acetate implant).
Intarcia has its eye on using DUROS in endocrinology, metabolic disorders, multiple sclerosis and other chronic diseases. First up will be diabetes, where the company plans to initiate Phase I trials with a GLP-1 (glucagon-like peptide-1) DUROS formulation in 2008. Leung said the GLP-1 peptide has been evaluated in about 200 patients but has historically proven difficult to deliver due to its short half-life, which Intarcia hopes to address.
Leung expects the $50 million Series BB financing to give Intarcia "about two years worth of runway" - sufficient time to get Phase II viral response data with Omega DUROS and establish clinical proof of concept with GLP-1 DUROS.
After that, who can say if Intarcia will try to brave the public markets a third time. Leung confirmed that the company's license to the DUROS technology is fully-transferable, should Intarcia seek an alternative exit, such as an acquisition, instead.
In other financings:
• Chelsea Therapeutics International Ltd., of Charlotte, N.C., raised $12.5 million shares through the sale of 2.6 million shares at $4.72 per share along with five-year warrants for an additional 794,000 shares at $5.66 per share. The financing is expected to close on or about March 22, subject to customary closing conditions. Leerink Swann & Co. served as placement agent with ThinkEquity Partners acting as financial advisor. Proceeds from the offering will be used to fund Phase II trials with the antifolate compound CH-1504 in rheumatoid arthritis and Phase III trials of the norepinephrine precursor Droxidopa in neurogenic orthostatic hypotension. Chelsea's shares (NASDAQ:CHTP) rose 28 cents to close at $5 on Monday.
• Memory Pharmaceuticals Corp., of Montvale, N.J., secured a $10 million loan through Hercules Technology Growth Capital Inc. As part of the transaction, Memory issued to Hercules a five-year warrant to purchase 598,086 shares of common stock at an exercise price per share of $2.09 per share, a discount to Friday's close of $2.20. Last week, Memory started a Phase IIa clinical trial of MEM 3454 in Alzheimer's disease. Earlier this month, the company's shares slid 30 percent after a Phase IIa study of MEM 1003 in bipolar disorder patients with acute mania failed to demonstrate efficacy. MEM 1003 is also being studied in a Phase IIa Alzheimer's disease trial. (See BioWorld Today, Mar. 6, 2007. Memory stock (NASDAQ:MEMY) closed at $2.21 Monday, up 1 cent.