Biotech spin­out grabs $46M round, jumps straight in­to PhI­II with a drug/de­vice com­bo for rare lung con­di­tion

Jens Stege­mann, CEO

The Ger­man aerosol ther­a­py com­pa­ny PARI Phar­ma­ceu­ti­cals is spin­ning out a Phase III ef­fort to de­vel­op a drug/de­vice com­bo that match­es an in­haled for­mu­la­tion of an im­muno­sup­pres­sant with a re­mote­ly mon­i­tored de­liv­ery de­vice to treat a rare lung con­di­tion. And it’s re­cruit­ed a trio of Eu­ro­pean ven­ture groups, in­clud­ing Sofinno­va Part­ners in Paris, to back a €43.5 mil­lion (about $46 mil­lion) round to boot it up to reg­u­la­tors on both sides of the At­lantic.

The idea is sim­ple. In­ves­ti­ga­tors will use an aerosolized ver­sion of li­po­so­mal cy­closporine A, de­liv­ered through a neb­u­liz­er with re­mote mon­i­tor­ing tech­nol­o­gy from PARI to eval­u­ate its ef­fect on Bron­chi­oli­tis Oblit­er­ans Syn­drome, or BOS, a lethal or­phan res­pi­ra­to­ry dis­ease in­volv­ing lung trans­plant re­jec­tion. This ver­sion of the im­muno­sup­pres­sant is de­signed to con­cen­trate the ther­a­py in the lung, where it’s need­ed to pre­vent graft re­jec­tion.

The work is based on re­search al­ready con­duct­ed at PARI — which has been do­ing re­search work with in­haled li­po­so­mal cy­closporine A for years — along with guid­ance from lung trans­plan­ta­tion ex­pert Al­do Ia­cono at the Uni­ver­si­ty of Mary­land. The com­pa­ny will be based in Mu­nich and Frank­furt.

Gimv and Sofinno­va Part­ners co-led the round for Breath Ther­a­peu­tics and were joined by Gilde Health­care.

Graziano Seghezzi, a part­ner at Sofinno­va, says the deal fits in­to their sweet spot for new in­vest­ments. It aims straight at a crit­i­cal stage of de­vel­op­ment un­der an ex­pe­ri­enced team that has de­vel­oped da­ta on the pro­gram, some of which is about to be pub­lished. Right now, he tells me, it’s too ear­ly to say just how long it will take to com­plete Phase III, as the biotech is still “deep in con­ver­sa­tions” with the FDA. And, he adds, it’s pos­si­ble that the com­pa­ny may go on to work on ad­di­tion­al projects, some of which are cur­rent­ly un­der re­view.

PARI busi­ness de­vel­op­ment ex­ec Jens Stege­mann is tak­ing the helm as CEO of the spin­out, which plans to go straight in­to Phase III stud­ies in Eu­rope and the US, with an eye to tak­ing the piv­otal da­ta to the FDA and EMA.

Said Stege­mann:

Our strat­e­gy is to de­posit high con­cen­tra­tions of an im­muno­sup­pres­sive agent di­rect­ly in­to the small air­ways of the lung. With this top-tier group of in­vestors and the best in­ter­na­tion­al lung trans­plan­ta­tion cen­tres sup­port­ing us, we now are in an ex­cel­lent po­si­tion to achieve ground-break­ing im­prove­ments in the com­bat of BOS.

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With 39 new listings on the books and roughly two more months to go before winding down, Nasdaq’s head of healthcare listings Jordan Saxe sees the exchange marking 50 to 60 biopharma IPOs for the year.

“December 15 is usually the last possible day that companies will price,” he said, as companies get ready for business talks at the annual JP Morgan Healthcare Conference in January.

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UP­DAT­ED: Speak­er Nan­cy Pelosi to un­veil bill for fed­er­al­ly ne­go­ti­at­ed drug prices

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The need to limit drug prices is a rare point of agreement between President Trump and Democrats, although the president has yet to comment on the proposal and will likely face pressure to back a more conservative option or no bill at all. Republican Senator Chuck Grassley is reportedly lobbying his fellow party members on a more modest proposal he negotiated with Democratic Senator Ron Wyden in July.