It took 18 months for John Hood to get the late-stage drug fedratinib back from Sanofi, assemble a small crew of execs for his startup Impact Biomedicines and bring Medicxi in for a $22.5 million round to get this JAK2 kinase inhibitor back on track. And in the last 14 days, he’s completed a deal for up to $90 million in financing needed to launch the drug — provided the FDA is willing.
“It takes a lot of money to launch a drug,” Hood tells me in an update. And now he has it.
None of this new money, by the way, is diluting his group’s equity stake.
Hood left his job as a co-founder and CSO of regenerative med biotech Samumed to mount a salvage operation on fedratinib — a myelofibrosis drug the FDA dropped a clinical hold on way back in 2013 after some patients began to develop Wernicke’s encephalopathy.
Sanofi shelved the drug after the safety issue erupted, but now Hood — the co-inventor of the drug when he ran R&D at TargeGen, acquired by Sanofi in a $635 million deal — has also convinced the FDA that the lethal side effect researchers fretted about four years ago could be managed, getting that hold lifted.
The $90 million is coming from Oberland Capital in a series of milestone payments based on Hood’s success at moving forward in this campaign. The first $20 million comes with the FDA’s clarification of the regulatory path ahead. The next $20 million comes when the drug is filed. Then they can get up to $50 million to fund the launch, which Hood reckons will require an orphan drug sales force of about 40.
Oberland’s betting on the drug’s near-term success, with a deal to get paid back through drug royalties, a creative way for Hood and his organization to hang on to equity.
Hood is optimistic that Sanofi, which took an equity stake in the biotech in exchange for the rights, had done the hard clinical work to get fedratinib ready for an NDA. He feels he has the data in hand to prove that the drug is the best second-line therapy available for myelofibrosis patients, the best hope for patients who are no longer responding to standard of care.
If he pulls this off with a virtual crew and mostly non-dilutive cash where the giant Sanofi had failed, it will be one of the comeback stories of the decade.
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