Deals, Startups

With help from J&J, upstart Provention lands rights to two mid-stage IBD drugs and shoots for PhII

After setting up one biotech company with a drug plucked from the shelves of big pharma, the same team is doing it again.

Provention Bio execs — who unveiled a $28.4 million round just a few months ago that included a significant contribution from J&J — are unveiling a new deal with the pharma giant today, bagging rights to a pair of mid-stage assets they plan to hustle into mid-stage studies designed to illustrate quickly whether they have something that can be pointed to a pivotal study.

Ashleigh Palmer

Provention Bio is run by three key execs: CEO Ashleigh Palmer, CMO Eleanor Ramos and scientific co-founder Francisco Leon. Palmer and Leon had already set up Celimmune, which is devoted to advancing a new drug for Celiac disease, which they got from Amgen. And Leon, a former researcher at J&J, has direct experience with the two drugs they’re picking up from J&J for their new company.

The drugs are PRV-6527 (JNJ-40346527), an oral Colony Stimulating Factor-1 Receptor (CSF-1R) small molecule inhibitor for Crohn’s disease, and PRV-300 (JNJ-42915925/CNTO 3157), an anti-Toll-Like Receptor 3 (TLR3) monoclonal antibody for ulcerative colitis. The CSF-1R drug has already been in human studies, including a failed mid-stage study for rheumatoid arthritis.

But Leon believes there’s a “good chance of repositioning (PRV-6527) in IBD; there’s no oral drug for moderate and severe Crohn’s.” And he can count on what researchers learned from Stelara as well as human and animal data to provide enough encouragement to back up the move back to the clinic.

The model that Provention is following strikes a familiar cord. A whole new wave of companies is being created from the discards at Big Pharma. Vivek Ramaswamy has turned it into an art form at Roivant, which has been raising big money to back more of these deals, while Biohaven was able to jump from early-stage research straight to late-stage by executing a deal with Bristol-Myers Squibb — allowing them to pull off a quick IPO.

In their earlier release on the fundraising, which included $6 million from J&J, $19 million from high net worth individuals and $3 million from the JDRF, the group mentioned they were looking to an IPO next year to provide continued funding. But when I talked to Palmer ahead of today’s announcement, he said they’re focusing on these two assets — plus an enterovirus vaccine they got in early — and will decide next steps on financing after they see some hard data.

Provention won’t be spending a ton of money on salaries or offices. The three key execs are part of a 6-member virtual team, which won’t get much bigger, says Palmer. Not only is the team small, but they’re scattered around the country, meeting in the virtual office as they use contractors on manufacturing and research.

“I’ve been developing drugs for 20 years,” says Ramos. “The cost of drug development is skyrocketing.” But the Provention team believes they can pull off two small, blended Phase I/II studies that can tell them if they’re on the right track.

Then they can make their go/no go decision.

Right now, the light is green.

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Research Scientist - Immunology
Recursion Pharmaceuticals Salt Lake City, UT
Director of Operations
Atlas Venture Cambridge, MA

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