His way: Greg Ver­dine is build­ing a new kind of drug, with back­ing from a dif­fer­ent kind of in­vestor

Af­ter help­ing spear­head the launch of a long string of biotechs over the years from his pres­ti­gious perch at Har­vard, Greg Ver­dine is now de­vot­ing the bulk of his time to lead­ing the ef­fort on grow­ing two biotechs from scratch. And he’s just chalked up a $66 mil­lion round to move one of them — Fog­Phar­ma — in­to the clin­ic next year with a new tech­nol­o­gy he’s con­vinced can break its way in­to ther­a­peu­tic ter­ri­to­ries that have re­mained off lim­its to de­vel­op­ers up to now.

Fog­Phar­ma has been en­gi­neer­ing a new kind of ther­a­peu­tic class, one that com­bines the cell-pen­e­trat­ing ca­pac­i­ty of small mol­e­cules with the tar­get-en­gag­ing tenac­i­ty of bi­o­log­ics in­to what he calls CPMPs — cell pen­e­trat­ing minipro­teins. 

The big idea here — if you strip it all down to the chas­sis — is that Ver­dine and his crew have de­vel­oped a struc­tur­al “brace” that promis­es to make their polypep­tides ef­fec­tive against tough tar­gets like β-catenin. The brace — Ver­dine’s “se­cret sauce” — locks the struc­ture in place and amps up its abil­i­ty to pen­e­trate a cell, ze­ro in on the spe­cif­ic tar­get and main­tain a high lev­el of the drug in blood for a sus­tained pe­ri­od. And he says that each suc­ces­sive it­er­a­tion of their drugs in pre­clin­i­cal test­ing has proven bet­ter at the big job they’re de­signed for: drug­ging the un­drug­gable.

Leon Chen

This new mon­ey in the B round gives Fog­Phar­ma the op­por­tu­ni­ty to take its β-catenin pro­gram — which in­volves Wnt path­way ac­ti­va­tion — in­to a Phase I/II pro­gram in the sec­ond half of next year while lin­ing up an IND on a Cbl-b in­hibitor pro­gram, with a third undis­closed ef­fort com­ing up the line. The dis­cov­ery plat­form in­cludes “three ad­di­tion­al, dis­tinct and dif­fer­en­ti­at­ed forms of cell-pen­e­trat­ing minipro­teins.” 

“The en­tire fi­nanc­ing is three-and-a-half years worth of mon­ey,” Ver­dine tells me. Add that to the $11 mil­lion in Se­ries A cash raised at three sep­a­rate points be­gin­ning in ear­ly 2016, and Ver­dine has round­ed up a to­tal of $77 mil­lion for Fog­Phar­ma.

But it could have been more if he had need­ed it.

Ge Li

Much of the seed mon­ey for Fog­Phar­ma came from Deer­field and WuXi’s cor­po­rate fund, over­seen by Ge Li, a man with ac­cess to a vast amount of cap­i­tal around the world. That kind of fi­nanc­ing al­lowed Ver­dine to cre­ate Fog­Phar­ma with­out be­ing forced to adopt the short-term tac­tics of tra­di­tion­al VCs in the busi­ness.

“We built the com­pa­ny on a dif­fer­ent mod­el,” says Ver­dine. “I want­ed to do this one from soup to nuts. For that rea­son in the Se­ries A we didn’t turn to ven­ture in­vestors who would come in and have a sig­nif­i­cant role in build­ing the com­pa­ny.”

With­out even a hint of boast­ing, Ver­dine be­lieves that with his re­la­tion­ships among elite biotech in­vestors, at this point in his ca­reer of de­vel­op­ing new drugs, he could raise a bil­lion dol­lars if need­ed. There’s an ap­petite for tru­ly pi­o­neer­ing drug de­vel­op­ment work, says Ver­dine, that looks to vault ahead on crit­i­cal, break­through ther­a­pies.

He has the re­sume to back it up. And he’s built a plat­form com­pa­ny which has the ca­pac­i­ty to find and eval­u­ate new tar­gets and prospec­tive new ther­a­pies in a mat­ter of months.

Jeff Leerink

It’s no ac­ci­dent that Ver­dine’s lead pro­gram forms a junc­tion with check­point ther­a­pies; the β-catenin/Wnt path­way dis­rupts im­mune re­spons­es and an ef­fec­tive push here holds the promise of over­com­ing ini­tial re­sis­tance to im­munother­a­py as well as the de­vel­op­ment of drug re­sis­tance to an ef­fec­tive treat­ment. And it’s the first such ther­a­py to make it to the thresh­old of a clin­i­cal tri­al.

But Ver­dine is a proud pa­pa to mul­ti­ple pro­grams, and he is just as ex­cit­ed, if not more so, by the Cbl-b im­muno-on­col­o­gy drug that’s com­ing up be­hind the lead.

“What we’ve seen is that these mol­e­cules can be tol­er­a­ble at rel­a­tive­ly high dos­es, with a sig­nif­i­cant im­pact on tu­mor growth,” he says.

Kr­ish­na Yesh­want

Ver­dine has been a cel­e­brat­ed sci­en­tist in the field of drug dis­cov­ery for more years than many of his stu­dents have lived. Along the way, he’s earned some close ties to a new breed of biotech in­vestors who have now come in to back Fog­Phar­ma and well as his sec­ond ven­ture, LifeM­ine.

The sci­en­tist and se­r­i­al en­tre­pre­neur owes much of his suc­cess in rais­ing cash to close ties with Asian groups that have be­come ac­tive play­ers in biotech.

Rick Klaus­ner

Ver­dine’s ex­pe­ri­ence in Chi­na has led him to Boyu Cap­i­tal — an in­flu­en­tial pri­vate eq­ui­ty group led by co-founder and part­ner Sean Tong — and Blue Pool. The Chi­nese ven­ture group 6 Di­men­sions Cap­i­tal came in with oth­er new in­vestors, in­clud­ing Google’s GV, Hori­zons Ven­tures, Nan Fung Group and Leerink Part­ners. Deer­field Man­age­ment came back with Boyu Cap­i­tal, WuXi AppTec Cor­po­rate Ven­tures and “a promi­nent in­ter­na­tion­al group of non-in­sti­tu­tion­al in­vestors” to com­plete the syn­di­cate.

That kind of back­ing al­lowed Ver­dine to build his board with in­di­vid­u­als who are all in on his R&D strat­e­gy, with Leon Chen from 6 Di­men­sions, Leerink’s Jeff Leerink, GV gen­er­al part­ner Kr­ish­na Yesh­want and Rick Klaus­ner, a founder at Juno Ther­a­peu­tics, join­ing the group.

The new mon­ey will al­low Fog­Phar­ma to grow from 26 staffers to­day to north of 40 by the end of the year. And it’s still ear­ly days.

A New Fron­tier: The In­ner Ear

What happens when a successful biotech venture capitalist is unexpectedly diagnosed with a chronic, life-disrupting vertigo disorder? Innovation in neurotology.

That venture capitalist was Jay Lichter, Ph.D., and after learning there was no FDA-approved drug treatment for his condition, Ménière’s disease, he decided to create a company to bring drug development to neurotology. Otonomy was founded in 2008 and is dedicated to finding new drug treatments for the hugely underserved community living with balance and hearing disorders. Helping patients like Jay has been the driving force behind Otonomy, a company heading into a transformative 2020 with three clinical trial readouts: Phase 3 in Ménière’s disease, Phase 2 in tinnitus, and Phase 1/2 in hearing loss. These catalysts, together with others in the field, highlight the emerging opportunity in neurotology.
Otonomy is leading the way in neurotology
Neurotology, or the treatment of inner ear neurological disorders, is a large and untapped market for drug developers: one in eight individuals in the U.S. have moderate-to-severe hearing loss, tinnitus or vertigo disorders such as Ménière’s disease.1 With no FDA-approved drug treatments available for these conditions, the burden on patients—including social anxiety, lower quality of life, reduced work productivity, and higher rates of depression—can be significant.2, 3, 4

Af­ter 4 years of furor, the FTC and New York state ac­cuse Mar­tin Shkre­li of run­ning a drug mo­nop­oly. And this time they plan to squash it

Pharma bro Martin Shkreli was jailed, publicly pilloried and forced to confront some lawmakers in Washington riled by his move to take an old generic and move the price from $17.50 per pill to $750. But through 4 years of controversy and public revulsion, his company never backed away from the price — left uncontrolled by a laissez faire federal policy on a drug’s cost.

Now the FTC and the state of New York plan to pry his fingers off the drug once and for all and open it up to some cheap competition.

Patrik Jonsson, the president of Lilly Bio-Medicines

Who knew? Der­mi­ra’s board kept watch as its stock price tracked Eli Lil­ly’s se­cret bid­ding on a $1.1B buy­out

In just 8 days, from December 6 to December 14, the stock jumped from $7.88 to $12.70 — just under the initial $13 bid. There was no hard news about the company that would explain a rise like that tracking closely to the bid offer, raising the obvious question of whether insider info has leaked out to traders.

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Short at­tack­er Sahm Ad­ran­gi draws crosshairs over a fa­vorite of Sanofi’s new CEO — with PhII da­ta loom­ing

Sahm Adrang Kerrisdale

Kerrisdale chief Sahm Adrangi took a lengthy break from his series of biotech short attacks after his chief analyst in the field pulled up stakes and went solo. But he’s making a return to drug development this morning, drawing crosshairs over a company that’s one of new Sanofi CEO Paul Hudson’s favorite collaborators.

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UP­DAT­ED: Ac­celeron of­fers thumbs up on a PhII suc­cess for would-be block­buster drug — and shares rock­et up

There’s no public data yet, but Acceleron $XLRN says that its first major trial readout of 2020 is a success.

In a Phase II study of 106 patients with pulmonary arterial hypertension (PAH), Acceleron’s experimental drug sotatercept hit its primary endpoint: a significant reduction in pulmonary vascular resistance. The drug also met three different secondary endpoints, including the 6-minute walking test.

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Civi­ca and Blue Cross Blue Shield launch new ven­ture to low­er gener­ic prices

Five years after Martin Shkreli put a smug face to the volatile prices companies can charge even for generic drugs, payers and governments are coming up with outside-the-box solutions.

The latest fix is a new venture from the Blue Cross Blue Shield Association, 18 of its members and Civica, the generics company founded in 2018 by hospitals fed up with high prices for drugs that had long-since lost patent protection. While Civica focused on drugs that hospitals purchased, the new company will aim to lower prices on drugs that, like Shkreli’s Daraprim, are purchased by individuals.

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Merck Invests in State-Of-The-Art Biotech Development Facility in Switzerland

Mer­ck KGaA match­es lofty R&D goals with €250M in­vest­ment in­to a new clin­i­cal man­u­fac­tur­ing site in Switzer­land

As Merck KGaA strives to prove itself as a capable biopharma R&D player, it has begun construction on a €250 million facility dedicated to developing and manufacturing drugs for use in clinical trials.

The German drugmaker chose a location at Corsier-sur-Vevey, Switzerland, where it already has a commercial manufacturing site, in order to “bridge together research and manufacturing.”

“This investment in the Merck Biotech Development Center reflects our commitment to speed up the availability of new medicines for patients in need, and confirms the importance of Switzerland as our prime hub for the manufacturing of biotech medicines,” CEO Stefan Oschmann said at the groundbreaking ceremony, according to a statement.

Breast can­cer ap­proval in tow, As­traZeneca, Dai­ichi armed an­ti­body scores in key gas­tric can­cer study

AstraZeneca kicked off Monday with a flurry of good news. Apart from unveiling positive results on its stroke trial testing its clot-fighter Brilinta, and welcoming its experimental IL-23 inhibitor brazikumab back from Allergan — the British drugmaker also disclosed some upbeat gastric cancer data on its HER2-positive oncology therapy it is collaborating on with Daiichi Sankyo.

Buoyed by the performance of its oncology drugs, last March AstraZeneca chief Pascal Soriot bet big to partner with Daiichi on the cancer drug, with $1.35 billion upfront in a deal worth up to roughly $7 billion. Roughly 8 months later, as 2019 drew to a close, the FDA swiftly approved the drug — trastuzumab deruxtecan — for use in breast cancer, months ahead of the expected decision date.

Sor­ren­to shrugs off an anony­mous pri­vate eq­ui­ty group’s $1B of­fer to buy the com­pa­ny

San Diego-based Sorrento Therapeutics isn’t going the M&A route — at least not today.

The biotech caused quite a stir when it put out word a few weeks ago that an unidentified private equity group was bidding a billion dollars-plus for the company. The news drove a quick spike in the company’s share price as investors hooked up for the ride — that didn’t happen.

The update sparked a 5% drop in the share price $SRNE ahead of the bell. It’s now trading just above $4, without any evidence that the $7 price looked like it was firm.