Puretech-backed Karuna makes Nas­daq de­but with $89M IPO

Bet­ting on the po­ten­tial of two old­er drugs to fight Alzheimer’s and schiz­o­phre­nia — Boston-based Karuna Ther­a­peu­tics has priced its up­sized ini­tial pub­lic of­fer­ing in the mid­dle of the range, rais­ing gross pro­ceeds of about $89 mil­lion.

The com­pa­ny, which will de­but on the Nas­daq un­der the sym­bol “$KRTX” on Fri­day, is work­ing on the hy­poth­e­sis that a com­bi­na­tion of mus­carinic acetyl­choline re­cep­tor ag­o­nist xanome­line — an Eli Lil­ly $LLY castoff — and tro­spi­um chlo­ride, an FDA-ap­proved mus­carinic re­cep­tor an­tag­o­nist to­geth­er will make an adept an­tipsy­chot­ic.

Steven Paul Linkedin

Once up­on a time, star CNS re­searcher (and for­mer Voy­ager chief) Steven Paul was at Lil­ly, where he worked on xanome­line. The drug is de­signed to tar­get M1 and M4 re­cep­tors in the brain — but ad­verse events trig­gered by off-tar­get ef­fects soured the US drug­mak­er on the drug. Last Au­gust, he was one of the syn­di­cates of in­vestors in­clud­ing ARCH Ven­ture Part­ners and the Well­come Trust that backed Karuna.

Ex­ist­ing an­tipsy­chot­ic treat­ments work pri­mar­i­ly by in­hibit­ing D2 dopamine re­cep­tors. Mus­carinic re­cep­tor ag­o­nists emerged in the 1990s as a po­ten­tial al­ter­na­tive ap­proach for treat­ing psy­chosis —  but the de­vel­op­ment of such ther­a­peu­tics has been lim­it­ed by un­de­sir­able side-ef­fects that are trig­gered by the stim­u­la­tion of mus­carinic re­cep­tors in pe­riph­er­al tis­sues.

An­drew Miller Linkedin

Karuna — whose COO is MIT grad­u­ate An­drew Miller — con­tends that the ad­di­tion of tro­spi­um chlo­ride will counter the ad­verse event pro­file of xanome­line. The com­bined prod­uct,  dubbed KarXT, is de­signed to make a bee­line for mus­carinic re­cep­tors in the cen­tral ner­vous sys­tem and to ig­nore pe­riph­er­al tis­sues.

The lead ex­per­i­men­tal treat­ment is be­ing test­ed as a treat­ment for psy­chosis in a mid-stage study with schiz­o­phre­nia pa­tients — da­ta is ex­pect­ed by the end of the year. It is al­so in ear­ly-stage pro­grams for oth­er schiz­o­phre­nia symp­toms, Alzheimer’s-re­lat­ed psy­chosis and pain.

Oth­er drug­mak­ers have al­so been se­duced by the po­ten­tial of mus­carinic re­cep­tors. For in­stance, Al­ler­gan $AGN inked a $3.3 bil­lion deal to in-li­cense M1 and M4 tar­get­ed drugs from Hep­tares in the spring of 2016.

Less than a year af­ter rais­ing $42 mil­lion, PureTech-backed Karuna laid the ground­work for a $75 mil­lion IPO ear­li­er in June. Karuna orig­i­nal­ly filed to of­fer 4.4 mil­lion shares. On Thurs­day, the firm said it is of­fer­ing 5.6 mil­lion at $16, the mid­point of the $15 to $17 range.

So­cial im­age: Steven Paul, Karuna

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

Joe Jimenez, Getty

Ex-No­var­tis CEO Joe Jimenez is tak­ing an­oth­er crack at open­ing a new chap­ter in his ca­reer — and that in­cludes a new board seat and a $250M start­up

Joe Jimenez is back.

The ex-CEO of Novartis has taken a board seat on Century Therapeutics, the Versant and Bayer-backed startup focused on coming up with a brand new twist on cell therapies for cancer — a field where Jimenez made his mark backing the first personalized CAR-T approved for use.

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Can we make the an­tibi­ot­ic mar­ket great again?

The standard for-profit model in drug development is straightforward. Spend millions, even billions, to develop a medicine from scratch. The return on investment (and ideally a tidy profit) comes via volume and/or price, depending on the disease. But the string of big pharma exits and slew of biotech bankruptcies indicate that the model is sorely flawed when it comes to antibiotics.

The industry players contributing to the arsenal of antimicrobials are fast dwindling, and the pipeline for new antibiotics is embarrassingly sparse, the WHO has warned. Drugmakers are enticed by greener pastures, compared to the long, arduous and expensive path to antibiotic approval that offers little financial gain as treatments are typically priced cheaply, and often lose potency over time as microbes grow resistant to them.

The FTC and New York state ac­cuse Mar­tin Shkre­li of run­ning a drug mo­nop­oly. They plan to squash it — and per­ma­nent­ly ex­ile him

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. And their lawsuit is asking that Shkreli — with several years left on his prison sentence — be banned permanently from the pharma industry.

UP­DAT­ED: Ac­celeron res­ur­rects block­buster hopes for so­tater­cept with pos­i­tive PhII — and shares rock­et up

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.

“We’re thrilled to report such positive topline results from the PULSAR trial,” Acceleron CEO Habib Dable said in a statement. The company said in a conference call they plan on discussing a Phase III trial design with regulators.

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Amber Saltzman (Ohana)

Flag­ship's first ven­ture of 2020 is out, and it's all about sperm

A couple years ago, Amber Salzman got a call as she was returning East full-time after a two-year stint running a gene therapy company in California.

It was from someone at Flagship Pioneering, the deep-pocketed biotech venture firm. They had a new company with a new way of thinking about sperm. It had been incubating for over a year, and now they wanted her to run it.

“It exactly fit,” Salzman told Endpoints News. “I just thought I had to do something.”

Pfiz­er ax­es 6 ear­ly to late-stage can­cer stud­ies from the pipeline — with one oth­er cut for sick­le cell dis­ease

Pfizer trimmed a group of 3 R&D programs using their PD-L1 Bavencio — partnered with Merck KGaA — in their latest pipeline cull.

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UP­DAT­ED: In­cyte scores much need­ed PhI­II suc­cess — and of course it’s de­liv­ered by rux­oli­tinib

Incyte’s efforts to breathe a second life into ruxolitinib — its JAK inhibitor sold in pill form as Jakafi — has been greeted with clear, if preliminary and unsurprising, Phase III success.

Topline data from the TRuE-AD2 cements ruxolitinib’s foundational importance for Incyte, and gives analysts hope that there might yet be room for growth in a pipeline that’s suffered multiple R&D setbacks.

Stephen Hahn, AP

The FDA un­veils a new reg­u­la­to­ry frame­work to speed along gene ther­a­pies, re­ward­ing the lead­ing play­ers

Bioregnum Opinion Column by John Carroll

The emphasis at the FDA over the past 5 years or so has been on assisting drug developers as much as they can to speed up regulatory reviews and push more drugs into the market. And they are now crafting a final set of regulations aimed at flagging through a whole new generation of gene therapies in clinical testing at a rapid clip.

In a set of 6 prospective guidances posted on the FDA web site Tuesday morning, FDA commissioner Stephen Hahn committed the agency to staying flexible in handing out designations that are critical to gaining early approvals for drugs that claim to be once-and-done but don’t have anything close to the data needed to prove it.

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