Eight years ago, a drug called teplizumab went down in flames after it failed in a pivotal diabetes study undertaken by Eli Lilly. But yesterday a little startup called Provention Bio in-licensed it from MacroGenics, the original developer, whipped around and today used it as their lead drug for a $56 million IPO filing.
Teplizumab wasn’t completely dead back in 2010 when Lilly dumped the whole thing. But it came awfully close to that.
Jeffrey Bluestone, a high-profile scientist at UCSF who had worked long and hard on the drug, never lost faith over 30 years of laboring on it. He continued to pursue human studies for the drug, watching large groups of diabetics respond favorably to the drug, but wearying at times at the task of trying to get some real money to back a comeback effort. We exchanged several messages about this drug a couple of years ago as Bluestone — now running the Parker Institute — pushed ahead.
The drug has shown value in preserving beta cells in the pancreas, reducing the need for insulin among Type 1 patients. And that’s where it will be tested in Phase III, with the study planned to launch next year.
“I am very excited about the “revival” of Teplizumab,” Bluestone tells me in an email. “My colleagues and I have always felt that the drug could be impactful for recent onset patients with Type 1 Diabetes and moreover other autoimmune diseases. The success in multiple Phase II trials conducted by the academic community gives me great hope for the potential for this drug to have an impact in a significant percentage of these patients. Onward and upward.”
Provention has been working off of a $28 million A round it nabbed a year ago. That’s not much. And the plans call for only a slice of it to be used to set up the Phase III. Provention also has PRV-6527 (the CSF-1R inhibitor JNJ-40346527, obtained from J&J) for Crohn’s disease, and the ulcerative colitis candidate JNJ-42915925 (PRV-300), an anti-TLR3 antibody.
The S-1 spells out all its licensing deals, including the $42.5 million it will owe MacroGenics based upon “the achievement of certain developmental and approval milestones for the first indication, and an additional $22.5 million upon the achievement of certain regulatory approvals for a second indication. In addition, we are obligated to make contingent milestone payments to MacroGenics totaling $225 million…” for sales milestones.
J&J also has a buy-back provision on PRV-6527, giving them the right to claw it back for $50 million after the next study.
The development of teplizumab will now lie primarily in the hands of Ashleigh Palmer, the CEO at Provention who owns 12.2% of the company, and Francisco Leon, a J&J vet who once ran early-stage development work for J&J in immunology who also owns 12.2% of the company. MacroGenics now owns 10% of the company and J&J Innovation is a backer with 11.2%. MDB owns 10.8%.
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