Sanofi’s scope in genetic medicines is expanding to muscle disorders through a new alliance with a preclinical biotech startup. The pharmaceutical giant is also bringing a key piece for the RNA therapy that partners will develop together for a particular form of muscular dystrophy.

Under the terms of the agreement announced Tuesday, Sanofi will collaborate with miRecule, a Gaithersburg, Maryland-based startup that develops RNA therapies that target and fix a genetic abnormality that causes disease. The alliance covers miRecule’s drug candidate for facioscapulohumeral muscular dystrophy (FSHD), the second most common type of muscular dystrophy. The disease has no FDA-approved therapies.

MiRecule’s technology identifies targets for RNA drugs by analyzing gene sequencing profiles and clinical outcomes from hundreds of patients. Those targets are screened to find the best RNA therapeutic for a subset of patients. The therapies use an antibody to direct RNA to target tissues. The combination of the molecules creates what miRecule calls antibody-RNA conjugates, or ARCs.

FSHD is caused by abnormal expression of the DUX4 protein, which leads to progressive muscle weakness that primarily affects the face, shoulders, and upper arms. The miRecule FSHD program, code-named MC-DX4, is designed to use RNA to eliminate the expression of the DUX4 gene, thereby addressing the underlying cause of FSHD in muscle tissue. The new alliance will pair miRecule’s FSHD drug candidate with an antibody from Sanofi’s proprietary antibody platform.

The agreement gives Sanofi an exclusive license to miRecule’s FSHD therapy. The two companies will collaborate on research through the selection of a lead therapeutic candidate. After that, Sanofi takes over responsibility for the preclinical work to bring the therapy into human testing and subsequent clinical development. Sanofi will also handle commercialization of the product if it secures regulatory approval.

MiRecule is in line to receive an upfront payment and near-term milestone payments that could top $30 million combined, according to the agreement. Milestone payments could bring the biotech nearly $400 million, plus royalties from sales of an approved product.

“We look forward to working with miRecule to bring together our two groundbreaking technologies synergizing in a best-in-class therapy designed to suppress the underlying cause of FSHD. We hope that this will enable patients to live a life free from the debilitating symptoms of the disorder,” Pablo Sardi, Sanofi’s global head of rare and neurologic diseases research said in a statement. “We are excited to embark on this collaboration with miRecule as we work together to bring hope to the FSHD community.”

Sanofi’s RNA moves in the past year have focused mainly on messenger RNA. Last year, the pharmaceutical giant paid formed a new mRNA vaccines unit to expand applications of mRNA beyond Covid-19 vaccines. Months later, Sanofi paid $3.2 billion to acquire mRNA biotech Translate Bio. The $160 million acquisition of startup Tidal Therapeutics brought technology for developing mRNA vaccines for cancer. Sanofi also has an RNA interference therapy in its pipeline through an alliance with Alnylam Pharmaceuticals. That partnered therapeutic candidate, fitusiran, is being developed as a treatment for  hemophilia A and B.

MiRecule started in 2019, supported by the patient and academic communities as well as a grant from the National Institute of Neurological Disorders and Stroke. In addition to muscular dystrophy, miRecule is applying its technology to cancer. The biotech’s most advanced cancer program, MC-30, is in preclinical development for head and neck cancer. That RNA therapy is designed to correct a genetic mutation that leads to resistance to currently available cancer therapies.

Photo: Nathan Laine/Bloomberg, via Getty Images

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Immunology drug research has been casting about for better and safer ways to intervene in the inflammation driving autoimmune disorders. The recent FDA approval of a Bristol Myers Squibb plaque psoriasis drug made it the first approved product in a new class of medicines that address a particularly attractive enzyme target. Startup Sudo Biosciences aims to show that its drugs can be best in this emerging class, and it is now out of stealth with $37 million in funding.

The enzyme of interest is tyrosine kinase 2, or TYK2. It belongs to a protein family called Janus kinases (JAKs). Companies such as Pfizer, Eli Lilly, and AbbVie have commercialized JAK inhibitors for a range of autoimmune diseases, but their drugs come with the risk of severe side effects. Last year, an FDA inquiry into the safety of Pfizer’s commercialized JAK drug, Xeljanz, found a higher incidence of cardiovascular problems and cancer, which prompted the regulator to update black box warnings for that drug and other products in the JAK class.

TYK2 is an attractive drug target because, like its JAK cousins, it is also involved in signaling pathways associated with a wide range of immune-mediated inflammatory conditions. However, hitting TYK2 is hoped to offer a safety edge compared to JAK inhibitors. For a TYK2-targeting drug to work, the key is to bind to it without also hitting the other JAK family proteins. Menlo Park, California-based Sudo is now joining a growing group of companies taking a roundabout way to accomplish that task.

The way most small molecule drugs work is by binding to an active site on a target. Sudo’s drug, and other TYK2 inhibitors in the class, are allosteric inhibitors. Rather than binding to an active site, these drugs binds to a different spot that can still provide a desired therapeutic effect. According to Sudo CEO Scott Byrd, his company’s lead programs target the TYK2 pseudokinase domain. Hitting this target avoids also hitting JAK proteins that can trigger side effects.

“By allosterically regulating TYK2 kinase function through binding to the TYK2 pseudokinase domain (JH2 domain), significant improvement in selectivity versus other JAKs can be achieved,” he said in an email. “Increased selectivity provides the advantage of avoiding safety liabilities of agents known to inhibit JAK2 and/or JAK1.”

BMS drug deucravacitinib demonstrated that TYK2’s pseudokinase domain can be successfully drugged by a selective allosteric inhibitor. The September approval of that drug in plaque psoriasis came without the black box warning carried by JAK drugs, but its label does note that cancers were observed in clinical testing. BMS is marketing the pill under the name “Sotyktu.”

Investors are gaining confidence in TYK2 as a druggable target. Days after Sotyktu’s approval, Nimbus Therapeutics unveiled $125 million to fund mid-stage clinical trials of its TYK2-blocking drug in psoriasis and psoriatic arthritis. Ventyx Biosciences followed with a $177 million private placement to fund clinical development of its drug pipeline, including a TYK2-blocking drug.

Not all TYK2 drug research efforts have been successful. Sotyktu failed a Phase 2 test last year in ulcerative colitis. A test in that indication using a higher dose is ongoing. BMS also continues to test the drug in other immune disorders, such as lupus and psoriatic arthritis. The number of drugs vying to join the class is growing. BioCentury counts 11 TYK2 inhibitors in clinical trials, including three that take the dual approach of blocking both TYK2 and JAK1.

Sudo claims its drugs could be best in the TYK2 inhibitor class, but the company isn’t disclosing specifics. Byrd would only say that each of Sudo’s four programs has been designed to fill specific unmet needs unaddressed by known competitors on the market or in development. In indications already addressed by a competitor, Byrd said the goal is to show Sudo’s programs are better. Sudo’s disease targets also remain undisclosed for now, but Byrd said one program is an oral pseudokinase drug.

Though Sudo announced its launch this past week, it was founded in 2020. The company was formed by the life sciences arm of investment firm Frazier Healthcare Partners. In the announcement of Sudo’s launch, Dan Estes, general partner of Frazier Life Sciences, said that the startup emerged from discussions at Frazier that included scientists and others who saw an opportunity to target pseudokinase as a way to treat a range of autoimmune disorders.

Sudo’s Series A financing was led by Frazier Life Sciences and Velosity Capital. Sudo plans to use its new capital to advance the company’s lead drug candidates into human testing. Byrd declined to offer a timeline for reaching the clinic.

Photo by Sudo Biosciences

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Sanofi’s technology for making natural killer (NK) cell therapies came from an M&A move. The pharmaceutical giant just struck a deal that adds a CRISPR-editing technology to its to toolkit for developing NK cell-based therapies for cancer.

The CRISPR technology is from Scribe Therapeutics, a startup co-founded by CRISPR technology pioneer Jennifer Doudna. Whereas CRISPR’s initial development employed the Cas9 cutting enzyme, Alameda, California-based Scribe’s platform is comprised of gene-editing and delivery tools based on CasX, a protein discovered in Doudna’s lab. CasX is a smaller protein, which makes it a better fit for the in vivo gene-editing applications that are the focus of the startup’s internal research.

Sanofi will apply the Scribe technology to ex vivo NK cell therapies. According to financial terms announced Tuesday, the pharma giant is paying $25 million up front. Development and commercialization milestone payments to Scribe could top $1 billion; Scribe would also receive royalties from sales of any approved products that stem from the collaboration.

NK cells are a type of immune cell endowed with tumor-killing enzymes. NK cells seek out cancer cells to carry out their work, and they have application across many tumor types. Two years ago, Sanofi licensed an off-the-shelf NK cell therapy from Kiadis Pharma that was in preclinical development. The stated goal was to pair that drug with Sarclisa, a Sanofi antibody drug for multiple myeloma.

Months after the licensing deal was announced, Sanofi agreed to acquire the biotech outright for €308 million cash. Sanofi said Kiadis’s NK cell therapies would be developed as standalone treatments and in combinations with the pharma giant’s drugs. Sanofi’s pipeline currently lists one clinical-stage NK program from Kiadis: SAR445419, an off-the-shelf therapy, is in Phase 1 testing for acute myeloid leukemia.

Companies conducting NK cell research are working to bring cell therapy to solid tumors. The first cell therapies, based on engineering a patient’s own T cells, have worked only on blood cancers so far. Frank Nestle, Sanofi’s global head of research and chief scientific officer, said in a statement that his company sees NK cells having applications in both solid tumors and blood cancers.

“This collaboration with Scribe complements our robust research efforts across the NK cell therapy spectrum and offers our scientists unique access to engineered CRISPR-based technologies as they strive to deliver off-the-shelf NK cell therapies and novel combination approaches that improve upon the first generation of cell therapies,” he said.

Scribe emerged from stealth in 2020, backed by a $20 million Series A round of financing. Last year, Scribe closed a $100 million Series B round to finance further development of its technology platform and to advance its pipeline of CRISPR-based therapies for neurodegenerative disorders. The biotech’s neuroscience work previously led to a research partnership with Biogen focused on developing CRISPR-based therapies for amyotrophic lateral sclerosis. In May, the two companies announced that Biogen had exercised its option to expand the collaboration to an additional disease target in gene therapy. That target was not disclosed.

Photo: Nathan Laine/Bloomberg, via Getty Images

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An independent committee that advises the FDA on cancer drugs has weighed in on medicines from Spectrum Pharmaceuticals and Oncopeptides, issuing negative votes on both.

First up was Spectrum’s poziotinib, which was developed to treat advanced non-small cell lung cancer (NSCLC) characterized by HER2 exon 20 insertion mutations, a rare genetic signature that drives an estimated 2% to 4% of NSCLC cases.

FDA staff flagged safety concerns at the proposed dose 16 mg dose. In clinical testing, 57% of patients experienced dose reductions and 85% of patients had grade 3 or grade 4 adverse events. They also noted that Boston-based Spectrum is seeking accelerated approval at that once-daily 16 mg dose, but the planned confirmatory study will be at 8 mg twice daily. Last Thursday, the committee voted 9 to 4 that the therapy’s benefits do not outweigh its risks. An FDA decision for the drug is due by Nov. 24.

Following Spectrum, Oncopeptides faced the advisory committee regarding its multiple myeloma drug, Pepaxto. The FDA awarded Pepaxto accelerated approval last year, but months later issued an alert that noted a clinical trial found an increased risk of death associated with the drug. Oncopeptides then stopped marketing the drug in the U.S.

FDA staff pointed to results in a confirmatory trial for Pepaxto, which did not meet the goal of progression-free survival, a measure of how long patients live without their cancer worsening. Staff also added that overall survival was worse in the Pepaxto group. Results showed a higher total number and percentage of deaths in the Pepaxto arm compared to the group given a standard multiple myeloma treatment. Regulators in Europe reached different conclusions about the drug, approving it last month. It is marketed there as Pepaxti. But the FDA advisory committee remained unconvinced by the company’s analyses and the European approval. On the question of whether the drug’s benefits outweigh its risks, the committee answered “no” by a 14 to 2 vote.

The standard qualifier for every FDA advisory committee meeting is that the regulator is not required to abide by the committee vote, but it usually does. If that holds true for Spectrum and Pepaxto, the chances don’t look good for a favorable decision from the FDA.

Here’s a look at other recent regulatory news.

—An experimental gut microbiome therapy from Ferring Pharmaceutical won the backing of an FDA advisory committee, which voted 13 to 4 that the treatment’s data are adequate to support its efficacy. Switzerland-based Ferring designed its therapy, RBX2660, to reduce the recurrence of C. difficile infection (CDI). The committee also voted 12 to 1 with one abstention on the question of whether the data are adequate to support the safety of the Ferring therapy in those 18 and older following antibiotic treatment for recurrent CDI.

—Children have been excluded from many clinical trials due to what the FDA now says was a “misperception that excluding them from research was in fact protecting them.” That thinking is changing and the FDA has issued draft guidance setting out an ethical framework for including and protecting children in clinical trials. The draft is open to public comment for the next three months before the FDA finalizes the guidance.

—The FDA placed a partial clinical hold on a pivotal study testing Viaskin, a peanut allergy patch in development by DBV Technologies. That study has not yet started but France-based DBV said the agency has asked for adjustments to the statistical analysis of the patch’s adhesion, among other changes. According to DBV, the FDA said these modifications are needed for the study to support a future biologics license application.

—Eli Lilly cancer drug Retevmo received FDA approval for treating advanced solid tumors characterized by a RET gene fusion. The accelerated approval covers the treatment of cancers that have progressed following at least one prior treatment. Retevmo won its initial accelerated approval in 2020 for the treatment of three RET-driven cancers: non-small cell lung cancer (NSCLC), thyroid cancer, and medullary thyroid cancer. With the latest tumor agnostic approval, the 2020 accelerated approval in NSCLC has been converted to a traditional one.

Clinical trials of a Merck HIV drug that were paused by the FDA last year can now resume, but at a lower dose. Merck also said it will no longer pursue development of the HIV drug, islatravir, for HIV prevention. The FDA placed multiple tests of the drug on full or partial holds after the observation that some patients treated with islatravir developed lower levels of two types of immune cells.

—Larimar Therapeutics was also able to resolve a clinical hold. Last year, the regulator paused a dose-ranging clinical trial evaluating the biotech’s treatment for Friedreich’s ataxia, a rare neuromuscular disorder, after deaths were reported in a monkey study. Those deaths all happened in monkeys given the highest dose of the drug.

The lift of the full clinical hold comes with the imposition of a partial hold. The planned Phase 2 trial now has a requirement that the FDA review data from a lower 25 mg dose group before the study escalates to a higher dose in the second cohort. Larimar said it expects to begin this study in the fourth quarter of this year; data are expected in the second half of 2023.

Photo by FDA

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When Biogen’s experimental treatment for amyotrophic lateral sclerosis (ALS) missed the main goal of a pivotal study last year, the drugmaker said further analysis could yield better results. Additional data now show that treatment over a longer period of time led to improvement on several measures of the neuromuscular disorder.

The latest clinical trial results were published Wednesday in the New England Journal of Medicine. The data lend additional support for the drug, tofersen, which has been submitted for FDA review and is expected to receive a regulatory decision in early 2023.

Tofersen is an antisense oligonucleotide, a type of drug comprised of small pieces of DNA or RNA. The Biogen drug addresses a subset of ALS patients whose disease is driven by mutations to the SOD1 gene. These mutations lead to abnormal versions of the SOD1 protein believed to contribute to motor neuron dysfunction and cell death. Tofersen is designed to bind to and degrade SOD1 messenger RNA, which in turn reduces synthesis of SOD1 protein.

The main goal of the randomized, placebo-controlled Phase 3 test of the drug was to evaluate ALS patients on various functional measures at 28 weeks. According to results reported last October, the observed patient improvement was not enough to show statistical significance. However, investigators at the time noted that the results showed reductions in SOD1 protein and neurofilaments, filaments found in neurons that are considered a potential biological indicator of neurodegenerative disease.

Biogen did not give up on the drug. In June, the company presented data analysis  in which the randomized study at 28 weeks was combined with an open-label extension study at 52 weeks. In that new 52-week analysis, Biogen reported slower declines in measures such as respiratory function and muscle strength in those who started on tofersen earlier—the patients who received the study drug at the start of the study compared with those who started on placebo and were switched over to tofersen at week 28 to begin the extension study. These are the results that are now published in the New England Journal of Medicine.

Timothy Miller, co-director at the ALC Center at the Washington University School of Medicine and the principal investigator of the tofersen clinical trial, said in a prepared statement that in addition to the lowering of SOD1 protein, the drug led to “substantial lowering of neurofilament levels, which I interpret as potentially slowing the underlying disease process.” Miller added that looking at the results in the later time points in the open-label extension study show “meaningful clinical benefit.” The New England Journal of Medicine article notes that comparisons of earlier initiation of tofersen versus delayed initiation are still being evaluated in the extension stage of the clinical trial.

The 52-week data were part of Biogen’s submission seeking FDA approval. The FDA accepted that application in July, setting a Jan. 25, 2023 target date for a regulatory decision. At the time, the agency said it planned to convene an advisory committee meeting to discuss the application. The date for that meeting has not yet been set.

The published data for Biogen’s ALS drug come as an ALS drug from Amylyx Pharmaceuticals is making its way through regulatory review. Two weeks ago, an FDA advisory panel voted 7-2 in support of recommending approval of that company’s experimental ALS treatment, AMX0035. An FDA decision for the Amylyx drug is due by Sept. 29.

Meanwhile, another ALS drug developer, BrainStorm Cell Therapeutics, is taking a shot at FDA approval. Last year, the FDA called out Brainstorm’s analysis of its ALS drug, Nurown, saying that that in addition to missing the main clinical trial goal, the results fell did not show patient benefit. Nevertheless, Brainstorm said last month that it plans to seek FDA approval of its ALS therapy.

Photo: Adam Glanzman/Bloomberg, via Getty Images

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heart, doctor, cardiac

Gene therapy developer Rocket Pharmaceuticals is on track to seek FDA approval for its lead program but it’s also taking care to keep its pipeline stocked. The company has agreed to acquisition of Renovacor, a biotech developing a gene therapy for a genetically driven form of heart failure.

According to financial terms announced Tuesday, the all-stock deal represents an equity value of $53 million, or an implied value of $2.60 for each Renovacor share. That’s a 36.8% premium over the closing price of Renovacor’s closing stock price on Monday but a steep drop from a year ago, when the company went public via a SPAC merger and saw its shares new shares trade on the New York Stock Exchange for more than $10 apiece.

Cambridge, Massachusetts-based Renovacor develops gene therapies for genetically driven cardiovascular diseases. The company emerged in 2019 with an $11 million Series A round of financing for preclinical development of a gene therapy that addresses BLCL2-associated athanogene 3 (BAG3) mutations that lead to dilated cardiomyopathy, a severe form of heart failure. Renovacor was founded by Arthur Feldman, a cardiologist and professor of medicine at Temple University.

Lead Renovacor program REN-001 uses an adeno-associated virus (AAV) to deliver to cells a healthy version of the BAG3 gene. In preclinical testing, Renovacor said its gene therapy led to the production of functional BAG3 protein and improvement in cardiac function. Human testing is the next step. The company has said it expects to submit an investigational new drug application in the second half of this year to support a Phase 1/2 clinical trial. The Renovacor pipeline includes discovery-stage gene therapies addressing BAG3 mutations as well as the expression and function of that gene. The company has also expanded its research to include genetically driven arrhythmogenic cardiomyopathy.

“The acquisition of Renovacor aligns with our strategy to expand our leadership position in AAV-based gene therapy for cardiac disease and gives us a perfect opportunity to continue on our mission to transform the lives of heart failure patients through the power of gene therapy,” Rocket CEO Gaurav Shah said in a prepared statement.

Rocket’s cardiac gene therapy research focuses on Danon disease, a weakening of the heart muscle caused by mutations to the LAMP2 gene. The Cranbury, New Jersey-based company’s Danon program, RP-A501, is currently in Phase 1 testing. In a research note sent to investors, William Blair analyst Raju Prasad said the prevalence of BAG3-associated dilated cardiomyopathy is estimated to be as high as 30,000 patients in the U.S., a figure that is expected to grow with more genetic testing and disease awareness. He added that Renovacor brings synergies to Rocket, as both companies are using AAV-9 vectors to pursue genetically defined targets.

Rocket’s most advanced program, RP-L201, has reached pivotal Phase 2 testing for leukocyte adhesion deficiency-1 (LAD-1), a rare disorder caused by mutations to the gene that encodes CD18, a protein that helps white blood cells stick to blood vessels. Children born with LAD-1 are susceptible to fungal and bacterial infections that can become life-threatening. In May, Rocket reported data showing 100% survival in seven patients 12 months after infusion with the gene therapy. In its report of second quarter 2022 financial results last month, Rocket said it expects to file an application seeking FDA approval of its LAD-1 gene therapy in the first half of 2023.

The boards of directors of both Rocket and Renovacor have approved the acquisition, but approval by shareholders of both companies is still needed. The deal is expected to close by the first quarter of next year.

Photo: BrianAJackson, Getty Images

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graphic design of a liver

Genfit has a drug candidate on track toward clinical testing for a rapidly progressing and potentially fatal complication of chronic liver disease. By acquiring Versantis, it adds another drug that works in a different way and is further along in development for the same disorder.

Lille, France-based Genfit announced Monday that it has agreed to pay 40 million Swiss francs (about $41.4 million) to buy Versantis, a privately held Swiss biotech focused on developing liver disease drugs. In addition to the upfront payment, Versantis shareholders could earn up to 65 million Swiss francs (about $67.3 million) tied to clinical trial progress and regulatory approval of its lead asset.

The lead disease target of Zurich, Switzerland-based Versantis is acute-on-chronic liver failure (ACLF), a syndrome that can develop in patients whose chronic liver disease has progressed to cirrhosis. In addition to liver failure, this condition can lead to the failure of other organs such as the brain, kidneys, heart, and lungs. ACLF can rapidly progress to a coma and then death. According to Genfit, an estimated 137,000 patients are hospitalized with ACLF in the U.S. each year. The condition has no FDA-approved therapies.

The most advanced Versantis program, VS-01, employs liposomes, which are tiny, spherical vesicles that can be used as transport vehicles. The company says its drug clears toxic metabolites from the body, extracting them from the blood and taking them into the abdominal cavity, where they are taken up by liposomes that are then drained from the body. In a Phase 1b study, Versantis reported that its drug was safe and well tolerated by the 12 study participants, who experienced no dose-limiting toxicities. A 60-patient Phase 2 test is set to begin in the fourth quarter of this year. In addition to ACLF, the drug has potential application as a treatment of urea cycle disorder. The FDA has granted the drug a rare pediatric disease designation in this indication. In Europe, the Versantis drug candidate has orphan drug designation.

Genfit’s approach to developing an ACLF therapy involves repurposing nitazoxanide, or NTZ for short. This older drug is used to treat diarrhea and intestinal inflammation caused by parasites. Genfit is looking to apply the drug to liver and fibrotic diseases. The company said a meeting with the FDA is scheduled to discuss clinical trial plans for NTZ in ACLF following encouraging Phase 1 data that informs potential dose adjustments in patients with cirrhosis and liver impairment.

The Versantis acquisition is consistent with the liver disease focus that Genfit said it would maintain following the high-profile 2020 Phase 3 failure of elafibranor, a drug that the biotech was developing for the fatty liver disease non-alcoholic steatohepatitis (NASH). The company abandoned its pursuit of the drug for NASH, but restructured and focused development of the small molecule in primary biliary cholangitis, a different rare liver disorder. Late last year, Genfit licensed elafibranor’s global rights to Ipsen for €120 million up front. According to the licensing agreement, Genfit is still responsible for Phase 3 development of elafibranor until completion of that study’s double-blind treatment period.

Speaking on a conference call Monday, Genfit CEO Pascal Prigent said that the Versantis acquisition is a logical continuation of the rare liver diseases corporate strategy that the company started at the end of 2020. The Ipsen deal provided Genfit with cash to finance acquisitions, with an eye on assets that are in the clinic or close to clinical development. The Versantis acquisition brings Genfit programs for other liver disorders. VS-02 is in preclinical development for the treatment of chronic hepatic encephalopathy, a nervous system disorder triggered by advanced chronic liver disease. Versantis is also developing TS-01, a point-of-care diagnostic in development for at-home measurement of ammonia in the blood, which is the primary cause of hepatic encephalopathy.

“We believe Versantis’s portfolio of programs gives us exactly what we are looking for,” Prigent said. “After the acquisition, Genfit will have multiple promising programs in rare liver diseases, and will be a global leader in ACLF, a therapeutic area that we feel is both important and underserved.”

The acquisition agreement could yield more cash from the sale of an FDA priority review voucher. Under this FDA program, regulatory approval of a drug for a rare disease can lead to the award of a voucher that grants speedy review of another rare disease drug. This program is intended to incentivize rare disease drug development and the rare pediatric disease designation granted to VS-01 in urea cycle disorder makes it eligible for a voucher if the drug is approved.

A company awarded a voucher can apply it toward one of its own drugs, but many companies opt to sell these vouchers, fetching prices of $100 million or more. Under the acquisition agreement, Versantis is eligible to receive one third of the net proceeds from the sale of a voucher. If Genfit decides to use the voucher for one if its own programs, Versantis would be entitled to one third of the fair market value of the voucher.

Genfit expects to close the Versantis acquisition in the fourth quarter of this year.

Photo: eranicle, Getty Images

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Ten months after Acelyrin landed $250 million for mid-stage clinical development of an in-licensed immunology drug that could compete against blockbuster Novartis and Eli Lilly drugs, the biotech has raised $300 million more.

The new cash follows the report over the summer of positive Phase 2 data for izokibep, an antibody mimetic that blocks interleukin-17A. Los Angeles-based Acelyrin plans to use the latest fundraising haul to fund Phase 3 tests of its drug in psoriatic arthritis and axial spondyloarthritis.

Acelyrin’s Series C round of funding was the biggest biotech cash infusion of the past week. Here’s a recap of other notable financings:

Capstan Therapeutics emerged from stealth with $165 million raised to date as it works to advance toward the clinic with cell therapies engineered inside a patient’s body. The startup, which has operations in San Diego and Philadelphia, is based on research from University of Pennsylvania scientists with expertise in cell therapy and messenger RNA.

—Radiopharmaceuticals developer RayzeBio closed a $160 million Series D financing, which the company will apply toward more clinical tests of its lead asset, RYZ-101. A Phase 1b study is underway in neuroendocrine tumors; the company says Phase 3 tests could begin as early as next year. The FDA has also cleared the company to begin testing the radiopharmaceutical in non-small cell lung cancer.

Nimbus Therapeutics, a biotech company whose drug discovery approach is based on computational techniques, raised $125 million to back clinical development of programs in autoimmune diseases and oncology. One of those programs is blocks an enzyme called TYK2, which the Cambridge-based biotech is developing for moderate-to-severe plaque psoriasis and active psoriatic arthritis. The biotech is chasing Bristol Myers Squibb drug Sotyktu, whose recent FDA approval made it the first approved TKY2 inhibitor for moderate-to-severe plaque psoriasis.

—ATP, a venture capital firm formerly known as Apple Tree Partners, has merged three of its portfolio companies to form Galvanize Therapeutics, which is now backed by $100 million. San Carolos, California-based Galvanize is developing a pulsed electric field energy technology to treat various disorders including chronic bronchitis, cardiac arrhythmias solid tumors, as well as drug delivery. The new financing is a Series B round led by Fidelity Management & Research Company with participation from Intuitive Surgical, ATP, and Gilmartin Capital.

Forge Biologics, a company that operates as a gene therapy contract manufacturer while also developing its own therapies, closed a $90 million round. Columbus, Ohio-based Forge will use the new capital to expand its offerings to clients and bolster its manufacturing platform. The Series C financing was co-led by Drive Capital and Aisling Capital with an additional investor that remains undisclosed.

—SparingVision, a biotech developing gene therapies to treat inherited eye disorders, has raised €75 million. The Paris-based company will use the cash to begin clinical testing of two therapies, SPVN06 and SPVN20. SparingVision also plans to advance CRISPR-based gene-editing programs covered under a partnership with Intellia Therapeutics. The Series B round of financing was co-led by Jeito Capital and UPMC Enterprises. 4Bio Capital, Bpifrance, the RD Fund, and Ysios Capital also participated.

—Pretzel Therapeutics launched with $72.5 million to finance development of technology that modulates mitochondria, the energy-producing components of cells. Mitochondrial dysfunction is associated with more than 50 diseases, both rare and common. Waltham, Massachusetts-based Pretzel’s platform takes three approaches to affect mitochondrial function: genome correction, genome expression modulation, and mitochondrial control. Arch Venture Partners and Mubadala Capital led Pretzel’s Series A round.

Novome Biotechnologies raised $43.5 million for its gut microbiome approach to treating disease. The South San Francisco-based biotech’s lead program is in mid-stage testing for hyperoxaluria, in which people lack an enzyme needed to break down a compound in leafy greens called oxalate. Novome’s experimental treatment is comprised of bacteria engineered to break down oxalate. Tencent led Novome’s Series B financing.

—Carver Biosciences, a new company founded by Princeton University molecular biologist Cameron Myhrvold, emerged with an unspecified amount of seed financing led by Khosla Ventures. Boston-based Carver is developing antivirals that employ the CRISPR gene-editing system along with the RNA-directed Cas13 enzyme to target respiratory viruses. Myhrvold, whose research included developing Cas13-based technologies for studying viral host RNAs, founded Carver last year and will serve as the chair of the biotech’s scientific advisory board.

Picture: Feodora Chiosea, Getty Images

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Third Harmonic Bio is joining the public markets with a $183.3 million IPO that’s a stark outlier in the context of the near absence of new stock offerings in 2022. Record inflation, rising interest rates, and recessionary fears have chilled public financing activity in the year to date.

Not only has Third Harmonic pulled off a stock sale, but it was also able to boost the deal size. Wednesday evening, the biotech offered 10.9 million shares priced at $17 each, which was the midpoint of its targeted price range. When the company set financial terms for the IPO last week, it aimed to sell 9 million shares. Third Harmonic shares are slated to begin trading Thursday on the Nasdaq under the stock symbol “THRD.”

Cambridge, Massachusetts-based Third Harmonic is an inflammation and allergy biotech whose main asset, licensed from Novartis, has potential applications in several conditions. The small molecule, THB001, is designed to block KIT, a receptor that regulates mast cells, a type of immune cell. Mast cells play a role in many inflammatory conditions and blocking it has shown efficacy in some disorders, such as asthma. With the ability to selectively block KIT compared to other small molecule drugs, THB001 could avoid off target effects, the company said in its IPO filing.

So far, Third Harmonic has generated encouraging early Phase 1 data for its small molecule. Its lead disease target is chronic urticaria, an inflammatory skin disorder that leads to hives. Third Harmonic’s effort to block KIT trails a drug from Celldex Therapeutics. The Celldex drug, barzolvolimab, is in early clinical development for urticaria and other inflammatory disorders. But as an antibody, the Celldex drug is given as an intravenous infusion. The formulation of Third Harmonic’s drug as a more convenient oral pill should give it a dosing edge.

With the IPO cash, Third Harmonic plans to press ahead with multiple clinical trials testing its drug candidate. Between $80 and $90 million is earmarked for continuing clinical development of THB001 in urticaria by completing a Phase 1b study and starting a Phase 2 study, according to the IPO filing. The company expects to report initial data from the Phase 1b study in the first half of 2023. Applications to begin the Phase 2 tests in the U.S. and Europe are expected in the first half of 2024.

Another $30 million to $40 million of the IPO cash is planned for clinical development of the drug in other indications, including the completion of a Phase 1b test in asthma. Preliminary data from the asthma study are expected in the second half of 2024, according to the filing.

As of the end of the second quarter of this year, Third Harmonic reported having $112.7 million in cash and cash equivalents. The biotech projects that its cash reserves plus the funds from the IPO will support operations through 2025.

Here’s a look at some other stock market news this week for biotech companies:

No IPO for Elicio

Cancer immunotherapy developer Elicio Therapeutics is withdrawing its planned IPO. The Boston-based biotech had initially filed to go public in 2021, when financial conditions were more friendly for stock offerings. In a Sept. 13 letter to the Securities and Exchange Commission, Elicio offered no reason for the withdrawal other than to say it does not plan to pursue the stock offering at this time.

Elicio left the door open for a future IPO, asking the commission to credit the fees paid so far toward future use. The company’s lead drug candidate, ELI-002, is in Phase 1/2 testing as a potential treatment for cancers characterized by the KRAS mutation.

Know Labs’ stock finds a new home

Shares of medical diagnostics technology company Know Labs, which previously traded over the counter, have been uplisted to the NYSE American Exchange. Those shares are set to begin trading on Friday under a new stock symbol: “KNW.”

Seattle-based Know Labs says its technology directs electromagnetic energy through a substance or material to capture a unique molecular signature. The company is using this “Bio-RFID” technology to develop a non-invasive glucose monitor that provides users real-time information about their blood glucose.

Photo: Spencer Platt, Getty Images

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The IPO window has been closed to most biotech companies this year, but Third Harmonic Bio is pushing it open with a drug from Novartis that might work better than the wide selection of inflammation medicines already available to patients. The biotech has early clinical data showing signs of efficacy. Now the company wants to tap the public markets to finance further clinical development of the molecule in multiple inflammatory disorders.

Cambridge, Massachusetts-based Third Harmonic did not set any financial terms for the stock sale outlined in the preliminary IPO paperwork filed with regulators on Tuesday. However, IPO research firm Renaissance Capital said the offering could reach up to $150 million. Third Harmonic has applied for a Nasdaq listing under the stock symbol “THRD.”

Third Harmonic’s research focuses on the mast cell, a type of immune cell in the blood whose dysfunction is associated with the development of many allergic and inflammatory diseases. These cells are found throughout the body and are prominent on tissue with exposure to the external environment, such as the skin, respiratory tract, and gastrointestinal tract.

Lead Third Harmonic drug THB001 is a small molecule designed to block KIT, a cell surface receptor whose role is to regulate mast cells. In the IPO filing, the company notes that KIT inhibition has shown signs of efficacy in mast cell-mediated diseases such as asthma. A wide range of therapies already treat asthma and other inflammatory disorders, but Third Harmonic notes in the filing that many of these drugs are insufficient because they target the compounds that are produced by mast cells, such as histamines. For many diseases, multiple compounds are involved.

“As a result, we believe that targeting mast cells directly through highly selective inhibition of KIT is key to achieving the clinical efficacy needed for broad symptomatic relief across a range of allergic and other inflammatory disorders,” Third Harmonic said in the filing.

So far, Third Harmonic has tested its lead drug in a Phase 1a clinical trial. Though this study only enrolled healthy volunteers, the drug flashed indications of efficacy. The company reported that blood tests showed dose-dependent declines in tryptase, an enzyme released when mast cells are activated. Third Harmonic now aims to test whether its drug can treat chronic urticaria, an inflammatory skin condition characterized by hives and an itchy rash. The company said in the filing that it has submitted a clinical trial application in Europe for a dose-escalation Phase 1b study intended to show proof-of-concept in this disease. Data are expected in the second half of next year.

Asthma is the next disease target. Third Harmonic plans to start a Phase 1b study in the first half of 2023 and report data in the second half of 2024. The biotech is also eying the start of Phase 2 tests in chronic spontaneous urticaria. Those studies in the U.S. and Europe are planned for the first half of 2024. Third Harmonic describes its lead asset as a “pipeline in a product.” The company is exploring other diseases where stopping mast cell-driven inflammation may offer relief.

Third Harmonic has competition in its pursuit of a better drug for urticaria, a condition whose first line of treatment is antihistamines. Blocking KIT is the objective of Celldex Therapeutics drug barzolvolimab, formerly known as CDX-0159. The Hampton, New Jersey-based biotech has reached early clinical development in urticaria and other inflammatory disorders. But as an antibody, that drug must be given as an intravenous infusion. Third Harmonic hopes that the oral formulation of its KIT-blocking drug gives it an edge.

Third Harmonic is led by CEO Natalie Holles, who previously served as chief executive of gene therapy developer Audentes Therapeutics (now a part of Astellas Pharma). Venture capital firm Atlas Venture founded Third Harmonic in 2019. That year, it licensed THB001 from Novartis for $400,000 cash and an equity stake in the emerging biotech. Much more could be paid out depending on the progress of the research: $31.7 million is tied to in development milestones and up to $200 million in sales and commercialization milestones. Novartis would also earn royalties from the sale of any approved products.

Third Harmonic raised $155 million in its start, most recently a $105 million Series B round that was announced in February. Atlas is the largest shareholder with a 37.9% stake, according to the filing. The Novartis Institutes for BioMedical Research owns 9.4% of the company.

As of June 30, Third Harmonic’s cash position was $112.7 million, which the company said will be enough to fund operations for at least 12 months. Third Harmonic plans to use the IPO cash to continue clinical development of TBH100, specifically the Phase 1b study in chronic inducible urticaria and the Phase 2 test in chronic spontaneous urticaria. The cash will support the planned Phase 1b test in asthma. The biotech also states in the filing that the capital may be deployed toward the development or acquisition of other programs.

Photo: Devrimb, Getty Images

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