Cir­cled by ri­val phar­ma gi­ants and a biotech pow­er­house, Ko­di­ak asks for a $100M-plus IPO for new eye drug

Ko­di­ak Sci­ences was nev­er one of those biotechs that liked to tout every fi­nanc­ing round or talk up its drug prospects. Helmed by biotech vet and for­mer MPM ven­ture part­ner Vic­tor Perl­roth, it turns out the biotech has been steadi­ly jock­ey­ing a new oph­thal­mol­o­gy drug right to the thresh­old of a soon-to-launch Phase II tri­al. And he’s aim­ing straight at cut­ting the legs out from un­der a block­buster fierce­ly de­fend­ed by one of the tough­est play­ers in drug R&D — once he com­pletes a $100 mil­lion-plus IPO.

And he has a an­oth­er pair of ma­jor league ri­vals look­ing to beat him to the punch.

Ko­di­ak — not to be con­fused with Doug Williams’ Co­di­ak — got start­ed in 2009; a few years af­ter Perl­roth sold off Avidia to Am­gen for $290 mil­lion in cash, plus an­oth­er $90 mil­lion in mile­stones.

Vic­tor Perl­roth

The com­pa­ny has burned through $85.7 mil­lion so far, ac­cord­ing to the S-1, which is close to the $93 mil­lion in rev­enue it’s not­ed rais­ing since launch, in­clud­ing a $33 mil­lion mez­za­nine round that came in last April, with Per­cep­tive Ad­vi­sors and Ar­row­Mark Part­ners lead­ing the round.

So far, those are the on­ly in­vestors that Ko­di­ak has pub­licly ac­knowl­edged. As a re­sult, Perl­roth is the biggest in­vestor high­light­ed in the IPO, with 24% of the shares, while co-founder Stephen Charles has 10%. That’s an un­usu­al­ly high founder fig­ure, if you com­pare it to the av­er­age ven­ture-backed biotech go­ing pub­lic.

Stephen Charles

The in­vest­ment cash has pushed a lead drug through a small, 9-pa­tient Phase I dos­ing and safe­ty study, which Ko­di­ak says came through with fly­ing col­ors. Now, though, the next step will cost con­sid­er­ably more than any­thing they’ve done so far.

The Pa­lo Al­to, CA-based biotech is lay­ing the ground­work for two Phase II stud­ies of its lead drug — KSI-301. The first will be an up­com­ing 400-pa­tient head-to-study pitch­ing its drug di­rect­ly against Eylea for wet age-re­lat­ed mac­u­lar de­gen­er­a­tion, Re­gen­eron’s cash cow. They’re go­ing af­ter a 16-week dos­ing sched­ule for eye in­jec­tions, com­pared to an 8-week dose that Re­gen­eron has in the la­bel, hop­ing to show that its less fre­quent in­jec­tion is non­in­fe­ri­or to the block­buster stan­dard. An­oth­er Phase II will ex­plore its ef­fi­ca­cy in di­a­bet­ic retinopa­thy.

Re­gen­eron re­cent­ly scored an ap­proval for a once-every-12 week dos­ing sched­ule, but Ko­di­ak’s S-1 notes that can on­ly start in the sec­ond year of treat­ment.

The cur­rent an­ti-VEGF drugs, Lu­cen­tis, Avastin and Eylea, have some lim­i­ta­tions that Ko­di­ak hopes to ex­ploit. 

For ex­am­ple, Lu­cen­tis was test­ed and failed to suc­cess­ful­ly ex­tend the treat­ment in­ter­val to 12-week dos­ing, with pa­tients go­ing back to pre-treat­ment base­line or even los­ing vi­sion at the end of the first year of treat­ment, on av­er­age. The Lu­cen­tis U.S. prod­uct la­bel­ing refers to this reg­i­men as an op­tion which is “not as ef­fec­tive” as month­ly dos­ing. Re­cent­ly, the FDA al­lowed an up­date to EYLEA’s la­bel­ing to al­low 12-week dos­ing, but on­ly in the sec­ond year of treat­ment (af­ter one full year of in­ten­sive treat­ment). The la­bel­ing refers to it as “not as ef­fec­tive as the rec­om­mend­ed every 8-week dos­ing.” Even a small de­vi­a­tion from per la­bel dos­ing can be dev­as­tat­ing for vi­sion. Miss­ing as few as one or two in­jec­tions in a year from EYLEA’s rec­om­mend­ed dos­ing, re­sults in al­most one line of vi­sion lost.

Ko­di­ak’s S-1 al­so notes that No­var­tis has a late-stage (the high­ly tout­ed ri­val brolu­cizum­ab), while Al­ler­gan is al­so a po­ten­tial com­peti­tor in the field with abic­i­par. There’s more, with Roche in hot pur­suit of RG7716 af­ter its first Phase II wrap ear­li­er this year.

Ko­di­ak couldn’t have cho­sen a more ag­gres­sive group of ma­jor league play­ers to take on. But they ap­pear ready to make a game try at beat­ing the lot.

Vlad Coric (Biohaven)

In an­oth­er dis­ap­point­ment for in­vestors, FDA slaps down Bio­haven’s re­vised ver­sion of an old ALS drug

Biohaven is at risk of making a habit of disappointing its investors. 

Late Friday the biotech $BHVN reported that the FDA had rejected its application for riluzole, an old drug that they had made over into a sublingual formulation that dissolves under the tongue. According to Biohaven, the FDA had a problem with the active ingredient used in a bioequivalence study back in 2017, which they got from the Canadian drugmaker Apotex.

Chas­ing Roche's ag­ing block­buster fran­chise, Am­gen/Al­ler­gan roll out Avastin, Her­ceptin knock­offs at dis­count

Let the long battle for biosimilars in the cancer space begin.

Amgen has launched its Avastin and Herceptin copycats — licensed from the predecessors of Allergan — almost two years after the FDA had stamped its approval on Mvasi (bevacizumab-awwb) and three months after the Kanjinti OK (trastuzumab-anns). While the biotech had been fielding biosimilars in Europe, this marks their first foray in the US — and the first oncology biosimilars in the country.

Seer adds ex-FDA chief Mark Mc­Clel­lan to the board; Her­cules Cap­i­tal makes it of­fi­cial for new CEO Scott Bluestein

→ On the same day it announced a $17.5 million Series C, life sciences and health data company Seer unveiled that it had lured former FDA commissioner and ex-CMS administrator Mark McClellan on to its board. “Mark’s deep understanding of the health care ecosystem and visionary insights on policy reform will be crucial in informing our thinking as we work to bring our liquid biopsy and life sciences products to market,” said Seer chief and founder Omid Farokhzad in a statement.

Daniel O'Day

No­var­tis hands off 3 pre­clin­i­cal pro­grams to the an­tivi­ral R&D mas­ters at Gilead

Gilead CEO Daniel O’Day’s new task hunting up a CSO for the company isn’t stopping the industry’s dominant antiviral player from doing pipeline deals.

The big biotech today snapped up 3 preclinical antiviral programs from pharma giant Novartis, with drugs promising to treat human rhinovirus, influenza and herpes viruses. We don’t know what the upfront is, but the back end has $291 million in milestones baked in.

Vas Narasimhan, AP Images

On a hot streak, No­var­tis ex­ecs run the odds on their two most im­por­tant PhI­II read­outs. Which is 0.01% more like­ly to suc­ceed?

Novartis CEO Vas Narasimhan is living in the sweet spot right now.

The numbers are running a bit better than expected, the pipeline — which he assembled as development chief — is performing and the stock popped more than 4% on Thursday as the executive team ran through their assessment of Q2 performance.

Year-to-date the stock is up 28%, so the investors will be beaming. Anyone looking for chinks in their armor — and there are plenty giving it a shot — right now focus on payer acceptance of their $2.1 million gene therapy Zolgensma, where it’s early days. And CAR-T continues to underperform, but Novartis doesn’t appear to be suffering from it.

So what could go wrong?

Actually, not much. But Tim Anderson at Wolfe pressed Narasimhan and his development chief John Tsai to pick which of two looming Phase III readouts with blockbuster implication had the better odds of success.

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Francesco De Rubertis

Medicxi is rolling out its biggest fund ever to back Eu­rope's top 'sci­en­tists with strange ideas'

Francesco De Rubertis built Medicxi to be the kind of biotech venture player he would have liked to have known back when he was a full time scientist.

“When I was a scientist 20 years ago I would have loved Medicxi,’ the co-founder tells me. It’s the kind of place run by and for investigators, what the Medicxi partner calls “scientists with strange ideas — a platform for the drug hunter and scientific entrepreneur. That’s what I wanted when I was a scientist.”

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Af­ter a decade, Vi­iV CSO John Pot­tage says it's time to step down — and he's hand­ing the job to long­time col­league Kim Smith

ViiV Healthcare has always been something unique in the global drug industry.

Owned by GlaxoSmithKline and Pfizer — with GSK in the lead as majority owner — it was created 10 years ago in a time of deep turmoil for the field as something independent of the pharma giants, but with access to lots of infrastructural support on demand. While R&D at the mother ship inside GSK was souring, a razor-focused ViiV provided a rare bright spot, challenging Gilead on a lucrative front in delivering new combinations that require fewer therapies with a more easily tolerated regimen.

They kept a massive number of people alive who would otherwise have been facing a death sentence. And they made money.

And throughout, John Pottage has been the chief scientific and chief medical officer.

Until now.

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H1 analy­sis: The high-stakes ta­ble in the biotech deals casi­no is pay­ing out some record-set­ting win­nings

For years the big trend among dealmakers at the major players has been centered on ratcheting down upfront payments in favor of bigger milestones. Better known as biobucks for some. But with the top 15 companies competing for the kind of “transformative” pacts that can whip up some excitement on Wall Street, with some big biotechs like Regeneron now weighing in as well, cash is king at the high stakes table.

We asked Chris Dokomajilar, the head of DealForma, to crunch the numbers for us, looking over the top 20 deals for the past decade and breaking it all down into the top alliances already created in 2019. Gilead has clearly tipped the scales in terms of the coin of the bio-realm, with its record-setting $5 billion upfront to tie up to Galapagos’ entire pipeline.

Dokomajilar notes:

We’re going to need a ‘three comma club’ for the deals with over $1 billion in total upfront cash and equity. The $100 million-plus club is getting crowded at 164 deals in the last decade with new deals being added towards the top of the chart. 2019 already has 14 deals with at least $100 million in upfront cash and equity for a total year-to-date of over $9 billion. That beats last year’s $8 billion and sets a record.

Add upfronts and equity payments and you get $11.5 billion for the year, just shy of last year’s record-setting $11.8 billion.

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Part club, part guide, part land­lord: Arie Bellde­grun is blue­print­ing a string of be­spoke biotech com­plex­es in glob­al boom­towns — start­ing with Boston

The biotech industry is getting a landlord, unlike anything it’s ever known before.

Inspired by his recent experiences scrounging for space in Boston and the Bay Area, master biotech builder, investor, and global dealmaker Arie Belldegrun has organized a new venture to build a new, 250,000 square foot biopharma building in Boston’s Seaport district — home to Vertex and a number of up-and-coming biotech players.

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