Chi­nook rais­es $106M in pri­vate place­ment as it pre­pares to close merg­er with Aduro

As Ver­sant-backed Chi­nook pre­pares to hit Nas­daq af­ter a merg­er with Aduro, the Van­cou­ver-based biotech has se­cured al­ter­na­tive fund­ing to an IPO.

Chi­nook raised $106 mil­lion in pri­vate place­ment fi­nanc­ing, the com­pa­ny said Tues­day, which is ex­pect­ed to close im­me­di­ate­ly be­fore the merg­er is com­plet­ed. Once that’s fin­ished, like­ly some­time be­fore the end of the year, Aduro will take on the Chi­nook name and trade un­der the tick­er $KD­NY.

Er­ic Dob­meier

CEO Er­ic Dob­meier said the com­pa­ny, which fo­cus­es pri­mar­i­ly on kid­ney dis­ease re­search, had orig­i­nal­ly been plan­ning a Se­ries B, but that changed when the op­por­tu­ni­ty to merge with Aduro came about.

“We did that deal with Aduro be­cause it got us an­oth­er pipeline pro­gram,” Dob­meier told End­points News. “It got us a lot of cap­i­tal as well as a lot of strong staff to help us ex­e­cute our plans. And af­ter the merg­er was an­nounced, we con­tin­ued dis­cus­sions with [po­ten­tial Se­ries B] in­vestors…they liked Chi­nook be­fore the merg­er, but they liked it even more af­ter we had an­oth­er as­set.”

New fund­ing was led by EcoR1 Cap­i­tal, Or­biMed, Rock Springs Cap­i­tal, and Avid­i­ty Part­ners. Chi­nook’s ex­ist­ing in­vestors, Ver­sant, Ap­ple Tree and Sam­sara, al­so pur­chased $25 mil­lion in com­mon stock.

Tues­day’s an­nounce­ment comes al­most a year to the day af­ter Chi­nook came out of stealth from a Ver­sant dis­cov­ery en­gine with a $65 mil­lion Se­ries A. From Ver­sant’s point of view, the fo­cus on kid­ney dis­ease is a bet that Chi­nook can get in front ear­ly among oth­er new star­tups in the field.

The new fi­nanc­ing will go to­ward sev­er­al Chi­nook and old Aduro pro­grams. Chi­nook’s lead can­di­date atrasen­tan, which was in-li­censed from Ab­b­Vie to­ward the end of 2019, is cur­rent­ly in Phase II and Phase III tri­als for the treat­ment of IgA nephropa­thy and oth­er pri­ma­ry glomeru­lar dis­eases.

There is al­so an on­go­ing Phase Ib study for BION-1301, Aduro’s IgG4 mon­o­clon­al an­ti­body that blocks APRIL bind­ing to both the BC­MA and TACI re­cep­tors. This can­di­date was the pri­ma­ry rea­son Chi­nook went down the merg­er route, Dob­meier said.

“There are com­pa­nies that will do re­verse merg­ers in­to a shell com­pa­ny in or­der to go pub­lic like a SPAC,” Dob­meier said. “This is dif­fer­ent in the sense that there are re­al as­sets, there’s a pro­gram, there’s peo­ple and there’s quite a bit more cap­i­tal than you would nor­mal­ly see.”

Chi­nook’s side of the pipeline deals large­ly with kid­ney dis­ease re­search, with its CHK-336 can­di­date for ul­tra rare or­phan kid­ney dis­ease hav­ing reached the IND-en­abling stage. Some of Tues­day’s cap­i­tal will help launch a Phase I tri­al in that area as well as ad­vanc­ing re­search in Chi­nook’s oth­er pre­clin­i­cal kid­ney dis­ease can­di­dates.

Aduro’s de­ci­sion to merge with Chi­nook comes af­ter a long string of set­backs over the years. Its two pro­posed can­cer vac­cines, GVAX and CRS-207, both bust­ed a few years ago. That prompt­ed J&J to back out of a $1.2 bil­lion deal in late 2018, forc­ing the com­pa­ny to axe about a third of its staff at the be­gin­ning of 2019.

Lat­er that year, No­var­tis dumped Aduro’s STING drug af­ter clin­i­cal da­ta showed lit­tle to no ben­e­fit. The be­lea­guered biotech, which by that point was trad­ing in the pen­ny stock ter­ri­to­ry af­ter hit­ting $40 per share in 2015, was forced in­to an­oth­er round of lay­offs this past Jan­u­ary.

Oth­er new in­vestors in­clud­ed Sur­vey­or Cap­i­tal, Al­ly Bridge Group, Monashee In­vest­ment Man­age­ment, North­leaf Cap­i­tal Part­ners, Janus Hen­der­son and Sphera Biotech.

Biotech Half­time Re­port: Af­ter a bumpy year, is biotech ready to re­bound?

The biotech sector has come down firmly from the highs of February as negative sentiment takes hold. The sector had a major boost of optimism from the success of the COVID-19 vaccines, making investors keenly aware of the potential of biopharma R&D engines. But from early this year, clinical trial, regulatory and access setbacks have reminded investors of the sector’s inherent risks.

RBC Capital Markets recently surveyed investors to take the temperature of the market, a mix of specialists/generalists and long-only/ long-short investment strategies. Heading into the second half of the year, investors mostly see the sector as undervalued (49%), a large change from the first half of the year when only 20% rated it as undervalued. Around 41% of investors now believe that biotech will underperform the S&P500 in the second half of 2021. Despite that view, 54% plan to maintain their position in the market and 41% still plan to increase their holdings.

Covid-19 vac­cine boost­ers earn big thumbs up, but Mod­er­na draws ire over world sup­ply; What's next for Mer­ck’s Covid pill?; The C-suite view on biotech; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

You may remember that at the beginning of this year, Endpoints News set a goal to go broader and deeper. We are still working towards that, and are excited to share that Beth Snyder Bulik will be joining us on Monday to cover all things pharma marketing. You can sign up for her weekly Endpoints MarketingRx newsletter in your reader profile.

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No­var­tis de­vel­op­ment chief John Tsai: 'We go deep in the new plat­form­s'

During our recent European Biopharma Summit, I talked with Novartis development chief John Tsai about his experiences over the 3-plus years he’s been at the pharma giant. You can read the transcript below or listen to the exchange in the link above.

John Carroll: I followed your career for quite some time. You’ve had more than 20 years in big pharma R&D and you’ve obviously seen quite a lot. I really was curious about what it was like for you three and a half years ago when you took over as R&D chief at Novartis. Obviously a big move, a lot of changes. You went to work for the former R&D chief of Novartis, Vas Narasimhan, who had his own track record there. So what was the biggest adjustment when you went into this position?

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Amit Etkin, Alto Neuroscience CEO (Alto via Vimeo)

A star Stan­ford pro­fes­sor leaves his lab for a start­up out to re­make psy­chi­a­try

About five years ago, Amit Etkin had a breakthrough.

The Stanford neurologist, a soft-spoken demi-prodigy who became a professor while still a resident, had been obsessed for a decade with how to better define psychiatric disorders. Drugs for depression or bipolar disorder didn’t work for many patients with the conditions, and he suspected the reason was how traditional diagnoses didn’t actually get at the heart of what was going on in a patient’s brain.

Susan Galbraith, Executive VP, Oncology R&D, AstraZeneca

As­traZeneca on­col­o­gy R&D chief Su­san Gal­braith: 'Y­ou're go­ing to need or­thog­o­nal com­bi­na­tion­s'

 

Earlier in the week we broadcast our 4th annual European Biopharma Summit with a great lineup of top execs. One of the one-on-one conversations I set up was with Susan Galbraith, the oncology research chief at AstraZeneca. In a wide-ranging discussion, Galbraith reviewed the cancer drug pipeline and key trends influencing development work at the pharma giant. You can watch the video, above, or stick with the script below. — JC

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Roche's Tecen­triq cross­es the fin­ish line first in ad­ju­vant lung can­cer, po­ten­tial­ly kick­ing off gold rush

While falling behind the biggest PD-(L)1 drugs in terms of sales, Roche has looked to carve out a space for its Tecentriq with a growing expertise in lung cancer. The drug will now take an early lead in the sought-after adjuvant setting — but competitors are on the way.

The FDA on Friday approved Tecentriq as an adjuvant therapy for patients with Stage II-IIIA non small cell lung cancer with PD-(L)1 scores greater than or equal to 1, making it the first drug of its kind approved in an early setting that covers around 40% of all NSCLC patients.

FDA ad­comm votes unan­i­mous­ly in sup­port of a J&J Covid-19 boost­er two months af­ter one-dose shot

The FDA’s Vaccines and Related Biological Products Advisory Committee (VRBPAC) on Friday voted 19-0 in favor of authorizing a second shot of J&J’s Covid-19 vaccine to follow at least two months after the initial dose.

Regulators don’t have to follow VRBPAC’s recommendation, but they almost always do. Considering that the CDC’s advisory committee has already been set to review the expanded EUA, VRBPAC’s recommendation is likely to be adopted.

Yao-Chang Xu, Abbisko Therapeutics founder and CEO

Qim­ing-backed Ab­bisko makes $200M+ Hong Kong de­but, as a SPAC and Agenus spin­out al­so price on Nas­daq

Three new entities priced their public debuts late Thursday and early Friday, including a SPAC, a traditional Nasdaq IPO and a Chinese biotech joining the Hong Kong Index.

Shanghai-based Abbisko Therapeutics raised the most money of the triumvirate, garnering $226 million in its Hong Kong debut and pricing at HK$12.46, or roughly $1.60 in US dollars. The blank check company followed up with a $150 million raise, while MiNK Therapeutics priced on Nasdaq at $12 per share and a $40 million raise.

Paul Grayson, Tentarix CEO (Versant)

Phar­ma vet­er­ans re­group with $50M and a plan to dis­cov­er new mul­ti-specifics

While a horde of drugmakers develops bispecific antibodies to more directly target tumor cells — there were about 100 programs in or nearing clinical trials back in May — a new company is emerging to go one step further.

On Thursday, Tentarix Biotherapeutics unveiled a $50 million Series A round to support its next-gen multi-specifics platform. While the field has largely focused on bispecifics, which engage two targets, Tentarix believes its multifunctional programs have the potential to be even more specific, since more conditions must be met for potent activity to occur.