Teva $TEVA has had a rough year. Plagued by crippling debt, the Israeli generics giant has undergone a massive reckoning that culminated in an executive exodus and a reorganization of the business. Matters went from bad to worse earlier this month when its migraine drug that was pegged to revive its fortunes was snubbed by US pharmacy benefit manager Express Scripts $ESRX in favor of rival treatments.
But where onlookers saw woe, OrbiMed saw opportunity.
The heavyweight healthcare VC bagged several early-stage drug candidates from Teva to form 89Bio, with ambitions in the red-hot NASH field as well as other liver and metabolic diseases. Bringing in Longitude Capital, RA Capital Management and Pontifax, the American and Israeli teams at OrbiMed managed to stack up $60 million for the upstart biotech and its lead product, a long-acting fibroblast growth factor 21 (FGF21) analog that is believed to have an impact on both the metabolic and scarring symptoms of the disease.
It’s not just assets that OrbiMed has tapped from Teva.
Michal Ayalon, the head of Teva’s FGF21 program and a former exec at NASH player Galmed $GLMD, is in charge of R&D at 89Bio. On the business side, 89Bio has recruited as COO and chief business officer Ram Waisbourd, whose most recent title at Teva was VP of strategy and transformation. Meanwhile, Michael Hayden, ex-R&D chief at Teva, is set to serve as a founding board member.
For the CEO role, OrbiMed has turned to Rohan Palekar, former president and chief of post-buyout Avanir who oversaw its integration with Otsuka. Prior to joining Avanir in 2012, Palekar was the chief commercial officer of Medivation, and held various positions at J&J $JNJ.
The company is ready to take BIO89-100 — the rechristened lead drug originally dubbed TEV-47948 — through Phase I testing with the funding. That would put them just a step behind Akero, another upstart in the San Francisco area working on a drug from Amgen $AMGN that also targets FGF21.
There’s no word on how much 89Bio paid to acquire the unwanted assets, but Palekar tells BioCentury that Teva does not hold equity in 89Bio.
OrbiMed managing director Anat Naschitz and venture partner Steve Squinto are also taking seats on the board, alongside Greg Grunberg of Longitude, Derek DiRocco of RA and Tomer Kariv of Pontifax.
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