It’s been a big year for Intarcia Therapeutics. The Boston- and Hayward, CA-based firm raised a massive round of private financing for its experimental drug/device combo treatment for Type 2 diabetes, and then followed that up with some encouraging data in late-stage clinical trials. Now, with that product, ITCA 650, potentially just a few years from the market, Intarcia has found a large pharmaceutical company to help sell it overseas in a deal that could be worth more than $1 billion.
France’s Servier has agreed to pay Intarcia $171 million up front, and potentially $880 million more in various development, regulatory, and sales milestones for the rights to ITCA 650 outside of the U.S. and Japan. Intarcia would also get royalties on sales at a range ranging from the “low double digits to the mid-30s” as part of the deal, according to a statement.
Intarcia, led by former Vertex Pharmaceuticals (NASDAQ: VRTX) executive Kurt Graves (pictured above), has pursued an unusual path. The company raised a $210 million private round back in 2012, and followed it up with another $200 million earlier this year from a range of investors, including those that typically invest in public companies (like RA Capital). The draw is ITCA 650, a tiny, implantable pump that steadily releases the diabetes drug exenatide to keep blood sugar levels in check. The idea is that type of control will help diabetes patients manage their condition better than today’s oral pills or injectable treatments. Because of how those treatments are absorbed into the body, their concentration levels in the blood can wax and wane. Intarcia’s device would be filled and implanted by a clinician once or twice a year.
Intarcia is currently testing ITCA 650 in a slate of four Phase 3 studies that are expected to wrap up in 2016, paving the way for regulatory filings. Earlier this year, it posted successful data from two of those studies. The company was able to parlay those data into today’s deal with Servier, a transaction Graves referred to as one of the largest non-U.S. partnering deals ever in biotech. Servier, which sells the diabetes drug gliclazide (Diamicron), signed up even with a big risk for failure—Intarcia is trying to show in its studies that ITCA 650 is better at managing diabetes than Merck’s sitagliptin (Januvia). So far, the treatment has only been tested against a placebo.
“We are already the highest valued private biotech company in history,” Graves said in a statement. “[N]ow we are firmly set up to retain full control of the U.S. operations as we continue on our path to build a fully capable and disruptively innovative biotech company with a pipeline of game changing, once-yearly medicines.”