Craig Parker, Surrozen CEO

The world of Wnt heads to Nas­daq as Sur­rozen an­nounces a $212M SPAC deal

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An­oth­er day, an­oth­er SPAC merg­er in the world of biotech.

Less than 24 hours af­ter Tan­go Ther­a­peu­tics an­nounced its own leap to Nas­daq through the blank check route, Sur­rozen has de­cid­ed to take a sim­i­lar step. The Wnt path­way-fo­cused biotech is re­verse-merg­ing with Con­so­nance Cap­i­tal Man­age­ment’s SPAC in a $212 mil­lion deal, which in­cludes $92 mil­lion from the shell com­pa­ny and $120 mil­lion in PIPE fi­nanc­ing.

The trans­ac­tion is ex­pect­ed to close in the third quar­ter, with Sur­rozen tak­ing on the tick­er $SRZN when it of­fi­cial­ly hits the mar­ket.

Sur­rozen is work­ing on a pipeline of ex­per­i­men­tal drugs that mod­u­late the Wnt path­way, which plays a role in the main­te­nance and self-re­new­al of stem cells in a va­ri­ety of tis­sues. Prod­ucts that af­fect Wnt sig­nal­ing, whose name com­bines Wing­less and Int-1, can be dif­fi­cult to man­u­fac­ture be­cause the process is high­ly un­sta­ble.

The goal, then, is to de­vel­op drugs that are flex­i­ble enough to ad­dress in­suf­fi­cient en­doge­nous Wnt or in­suf­fi­cient re­cep­tors that have the po­ten­tial to re­pair dam­aged tis­sue. So far, that’s tak­en the form of two lead pro­grams, one for in­flam­ma­to­ry bow­el dis­ease and an­oth­er to treat se­vere al­co­holic he­pati­tis.

Both pro­grams are ex­pect­ed to en­ter the clin­ic thanks to Thurs­day’s raise, Sur­rozen said, with funds tak­ing them through Phase Ib tri­als.

First, there’s SZN-1326, a bi-spe­cif­ic an­ti­body tar­get­ing Fzd5/8 and Lrp6 for IBD. Pre­clin­i­cal da­ta have shown the mol­e­cule can bind to Friz­zled re­cep­tors — where Wnt pro­teins sig­nal through — di­rect­ly and should stim­u­late re­gen­er­a­tion of in­testi­nal ep­ithe­lial cells.

Then there’s SZN-043, the se­vere al­co­holic he­pati­tis can­di­date, which is a he­pa­to­cyte-tar­get­ed R-spondin mimet­ic. Rather than bind­ing to the Friz­zled re­cep­tors as the IBD pro­gram does, this can­di­date sta­bi­lizes them to stim­u­late liv­er cell pro­lif­er­a­tion and re­duce fi­bro­sis.

Sur­rozen is hop­ing to uti­lize the two Wnt mod­u­lat­ing plat­forms that helped cre­ate these com­pounds to ex­pand in­to oth­er dis­eases, such as those in the eye, lung, kid­ney, cochlea, skin, pan­creas and cen­tral ner­vous sys­tem.

SPACs have cre­at­ed a whirl­wind on Wall Street, with the num­ber of blank check com­pa­nies pric­ing their IPOs in 2021 hav­ing al­ready sur­passed the to­tal from the last two years com­bined, ac­cord­ing to fig­ures from SPACIn­sid­er. The flur­ry has al­so drawn the eyes of in­ves­ti­ga­tors, with the SEC say­ing last month they have start­ed vol­un­tar­i­ly re­quest­ing in­for­ma­tion from banks in­to how they’re polic­ing the deals in­ter­nal­ly.

All the ac­tiv­i­ty has al­so prompt­ed con­cerns that there will soon be too many SPACs and not enough com­pa­nies with which to merge. Sur­rozen marks the 6th life sci­ences com­pa­ny to an­nounce its in­tent to merge in 2021, but there have been more than 30 that have priced this year, per an End­points News tal­ly.

For biotech, though, the SPAC wave has meant a whole new stack of cash for the com­pa­nies that do de­cide to es­chew the tra­di­tion­al IPO route. In­clud­ing Tan­go’s an­nounce­ment for sim­i­lar plans with Box­er Cap­i­tal’s blank-check com­pa­ny just yes­ter­day, the to­tal SPAC raise for these six com­pa­nies now equals about $2.9 bil­lion.

Un­pack­ing the Aduhelm de­ci­sion, Ver­tex's half full glass, a $525M J&J breakup, and more

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By now you have surely read about the FDA’s controversial approval of Biogen’s Alzheimer’s drug and all its reverberations. But I’d still recommend checking out the meaty recap below to make sure you didn’t miss all the angles that the Endpoints team has covered. If you’d rather look ahead, look no further than our three-day virtual panels next week at BIO, where we will discuss what the new normal means for every part of the industry.

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What does a clear ma­jor­i­ty of the bio­phar­ma in­dus­try think of the FDA ap­proval of ad­u­canum­ab? 'Hor­ri­fy­ing' 'Dan­ger­ous' 'Con­fus­ing' 'Dis­as­ter'

Over the years, we’ve become used to seeing a consensus emerge early in our industry polls at Endpoints News. And when we took the pulse of drug hunters on the heels of a controversial FDA approval for aducanumab this week, it became immediately apparent that the vast majority of our readers — heavily concentrated among biopharma staffers and execs — were incensed by what they had just witnessed.

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Aaron Kesselheim (Scott Eisen/AP Images for AIDS Healthcare Foundation)

Har­vard’s Aaron Kessel­heim re­signs from ex­pert pan­el in wake of ad­u­canum­ab OK, blast­ing FDA for ‘worst drug ap­proval de­ci­sion in re­cent U.S. his­to­ry'

A third member of the FDA’s Peripheral and Central Nervous System Drugs Advisory Committee has resigned in the wake of Biogen’s controversial Aduhelm approval, slamming the agency as he left and further deepening the controversy surrounding the decision.

Harvard University professor Aaron Kesselheim quit in protest Thursday afternoon, calling the Aduhelm OK “probably the worst drug approval decision in recent U.S. history.” Kesselheim follows both Joel Perlmutter, a neurologist from Washington University in St. Louis, and David Knopman, a neurologist from the Mayo Clinic, out the door.

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David Knopman (Mayo Clinic via YouTube)

A sec­ond ad­comm mem­ber aban­dons his post in af­ter­math of con­tro­ver­sial ad­u­canum­ab de­ci­sion

As the fallout from the FDA’s approval of Alzheimer’s med aducanumab grows, a second member of the adcomm overseeing that drug’s review has walked away. But even with two experts now having resigned from that committee in protest, is there enough broad-level outrage to prevent another aducanumab from getting approved?

The FDA on Wednesday lost another member of its Peripheral and Central Nervous System Drugs Advisory Committee as Mayo Clinic neurologist David Knopman hit the exit over the agency’s decision to approve Biogen’s Alzheimer’s drug Aduhelm despite the committee’s near-unanimous vote against it.

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FDA au­tho­rizes about 10M J&J vac­cine dos­es, trash­es 60M more from trou­bled Emer­gent plant

The FDA on Friday released about 10 million doses of J&J’s vaccine for use, and disposed of another 60 million doses that were manufactured at the now-shuttered Emergent BioSolutions facility in Baltimore where cross-contamination occurred.

The agency said it’s not yet ready to allow the Emergent plant to be included in the J&J EUA, but that may occur soon. FDA came to the decision to authorize some of the doses after reviewing facility records and quality testing results.

The IPO 4-1-1: Four fil­ings, a pric­ing and a with­draw­al head­line this week's Nas­daq ac­tion as raise ap­proach­es $7.5B

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Another week, another horde of biotechs is doing the Nasdaq dance.

This week saw four companies file their SEC paperwork ahead of expected debuts, another hit Nasdaq on Friday and a sixth formally withdrew its bid to go public. Aerovate Therapeutics, Ocean Biomedical and Acumen Pharmaceuticals all penciled in initial raises of $100 million, while Dermata Therapeutics is estimating a modest $18 million raise.

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Keiichi Fukuda, Heartseed CEO

Fresh off $598M deal with No­vo Nordisk, a Japan­ese stem cell com­pa­ny is on its way to the clin­ic with a dif­fer­ent ap­proach to treat­ing heart fail­ure

A common approach to treating heart failure with induced pluripotent stem cells involves grafting sheets of cells onto the surface of the heart to improve vascularization and blood flow. It’s the easiest method of transplantation — but you run the risk of not making an electrical connection with the heart and the cells not synchronizing with the patient’s heart muscle.

So what if you could inject spherical clusters of heart cells directly into the heart muscle wall? For Heartseed, that’s now the $37 million question.

Janet Woodcock, acting FDA commissioner, at Thursday's Senate Appropriations hearing (Bill Clark/CQ Roll Call via AP Images)

Sen­a­tors lam­bast new Alzheimer’s drug’s price but give Janet Wood­cock a free pass on the ap­proval de­ci­sion

Senate Finance Democrats took aim at Biogen’s pricey new Alzheimer’s drug on Thursday, but members on both sides of the aisle at a separate appropriations hearing didn’t question acting FDA commissioner Janet Woodcock on the approval.

“I was appalled that Biogen priced their Alzheimer’s drug approved by the FDA at $56,000 per year — I’m not going to debate whether this is effective or not, but it’s double the household median income for Michiganders over the age of 65,” Sen. Debbie Stabenow (D-MI) said at the finance hearing.

Reshma Kewalramani, Vertex CEO (BIO via YouTube)

UP­DAT­ED: Ver­tex strikes out on its lat­est big shot at a rare ge­net­ic dis­ease. But they're go­ing to keep on swing­ing

It’s been several months since Vertex culled one of its small molecules for alpha-1 antitrypsin deficiency (AATD), taking a big hit after evidence of liver damage surfaced in a key Phase II trial. Now we learned that the company has whiffed on its second shot, and there’s nothing left in the clinic to treat the rare genetic disease — but that won’t stop it from trying.

Despite avoiding the safety issues that plagued the last candidate, Vertex $VRTX is taking the axe to VX-864 after Phase II results revealed the magnitude of the drug’s response is “unlikely to translate into substantial clinical benefit.” As a result of the news, the company’s stock fell 12.5% after hours.

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