Savara hunts cash after doubling down on late-stage respiratory drugs
Austin-based Savara Therapeutics got started in biotech with a list of angel investors and a lead program that looked to develop an inhaled dry powder formulation of vancomycin for cystic fibrosis sufferers. Now, with its Phase III looming at the end of the year, the company has lined up another late-stage therapy, picking up the respiratory assets of Danish biotech Serendex in an acquisition as it hunts up fresh millions to do a considerable amount of development work.
Savara has always tended to keep its cards close to the vest, and isn’t saying just what it paid to get the Serendex drugs, built by a staff of 11 who will now join Savara’s 7-member team. It has moved on from the angel list to more substantial backers, execs say, but they aren’t saying who. And while it counts a total of $45 million raised in investments and grant money – including backing from the Cystic Fibrosis Foundation – CEO Rob Neville will now need to raise more money to push both products through to regulatory submission.
After raising $20 million from undisclosed investors a few months ago, he says, the company was ready to start enrolling patients for the lead Phase III without having all the money needed to finish it. Now with two late-stage efforts, he adds, the company reckons it will need $45 million to complete the pre-submission effort on both.
Serendex delisted a few months ago from the Oslo exchange, part of a process that Neville said was required to allow the companies to merge in a stock deal. And now he’d like to position Savara for a mezzanine round that might set the stage for an IPO — provided the markets start to look more favorably on biotech companies.
The lead product that attracted Savara’s attention is Molgradex, an inhaled form of granulocyte-macrophage colony-stimulating factor (GM-CSF) in a Phase II/III trial in Europe and Japan for autoimmune pulmonary alveolar proteinosis (PAP).
This treatment injects GM-CSF “directly into the lung almost as a replacement therapy,” says Savara COO Taneli Jouhikainen. “From pilot studies, academic work, we know that the drug works quite nicely.”
Neville sees it as a neat fit with Savara’s AeroVanc. The second product acquired in the deal is a preclinical, inhaled form of Factor VIIa, which Savara will take over development for a rare lung disease called diffuse alveolar hemorrhage (DAH).
“This is a big deal,” says Neville, one that makes Savara a different kind of company, with a pipeline of what he sees as largely de-risked drug programs worth watching. But without more transparency, that’s not a sentiment that’s easy to endorse.