Startups, Venture

Two R&D pros map a PhIII game plan with $65M round and a castoff from Pfizer

Can Corey Fishman and Michael Dunne come back and repeat the success they had with Durata?

A little more than two years after they succeeded in winning an approval for dalbavancin after spinning out of Pfizer with a castoff antibiotic and then selling the company to Actavis for $675 million, they have the money and another shelved Pfizer antibiotic to work with.

Michael Dunne

This morning they announced that their biotech Iterum had raised $65 million for the Series B, adding it to the $40 million that got things started in early 2016. Their syndicate of marquee venture players are backing a Phase III program for sulopenem, an old antibiotic that’s been around for years after showing some promise for combating Gram-negative pathogens. Iterum got the antibiotic from Pfizer, which put it on the shelf years ago. And Fishman and Dunne — the former COO and CMO at Durata — think they have a winner for a new product that could prove particularly useful for urinary tract infections and complicated intra-abdominal infections.

The Phase III is expected to get started next year, with an NDA in the works for 2019 if it all works out.

The feds have tried adding incentives to help encourage more antibiotic development work as the threat of drug resistance continues to grow, but it’s still fairly unusual to see late-stage programs like this. Older antibiotics are cheap, margins are thin and Big Pharma, including Pfizer, didn’t see a lot to gain by staying in the field.

R&D here isn’t necessarily easy, either, as Cempra illustrated with its recent woes for a lead antibiotic.

With a proven track record, though, Frazier Healthcare Partners, Canaan Partners, Sofinnova Ventures and New Leaf Venture Partners funded the A round and came back to help with the B, which was led by Arix Bioscience and also included first-timers Pivotal bioVenture Partners, Advent Life Sciences, Domain Associates and Bay City Capital.

Taking advanced experimental drugs off the shelves of Big Pharma in exchange for some equity has become a business model in biotech. Fishman and Dunne helped pioneer it and now they’re out to prove just how durable a strategy this can be.

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