SpringWorks Therapeutics, a startup spun out of Pfizer to develop drugs gathering dust on the New York pharma giant’s shelves, has closed its second nine-figure financing round in less than two years.
The $125 million Series B funding gives the New York City startup the backing to bring two cancer drugs into what could be their final trials before regulatory approval, if all goes well. Perceptive Advisors led the round, but Springworks also has the backing of two pharma companies—Pfizer (NYSE: PFE) and GlaxoSmithKline (NYSE: GSK)—and a variety of institutional investors, including OrbiMed Advisors, Bain Capital, and HBM Healthcare Investments.
The broad syndicate of pharmas, crossover investors, and others gives SpringWorks the look of a company headed towards an IPO, though CEO Saqib Islam isn’t commenting on its plans. “We will evaluate all financing options as we move forward,” he says. SpringWorks has now raised $228 million in 18 months.
SpringWorks spun out of Pfizer in late 2017 with a $103 million Series A and rights to four Pfizer drugs that no longer fit the company’s strategy. It did so as part of a plan to develop those drugs and other experimental therapies that pharma companies are leaving on the cutting room floor for one reason or another. It’s specifically targeting rare diseases and certain forms of cancer, Islam says.
Large pharmaceutical companies scrap experimental drugs all the time, and over the past several years, several entities have formed with different strategies based around the idea of grabbing those assets and developing them elsewhere. New Enterprise Associates formed orphan drug accelerator Cydan Development in 2013 so a team of experts could scour the globe for promising projects in rare diseases, sift through them, find some winners, and form companies around them. The idea behind Waltham, MA-based Tesaro—which GSK bought for $5.1 billion last year—was to buy up cancer drug candidates and rely on an expert team to develop them. Boston Pharmaceuticals, Ovid Therapeutics, and others have different takes on the plan. So does Vivek Ramaswamy, who has built several companies off a plan to similarly find deep discounts in pharma’s garbage bins and develop them quickly with loads of new cash. And of course, Big Pharma often licenses out individual assets to venture firms, biotechs, specialty pharmas, and others.
“The industry has experienced an increasing need to prioritize and focus R&D budgets,” Islam says. “Therefore, SpringWorks and other companies with similar business models fill a critical need.”
The new cash enables SpringWorks to push forward with three clinical studies in the first half of this year, two of which could be “registrational” trials, meaning the last before an approval filing, according to Islam. One study is a Phase 3 trial of the former Pfizer drug, nirogacestat—which the company originally aimed to test in breast cancer—in desmoid tumor, a benign growth in the connective tissue. (Nirogacestat had shown promise in treating desmoid tumors in earlier studies run by Pfizer.)
Current options for patients with desmoid tumors include surgery and other types of cancer drugs given off-label. But high rates of recurrence have made surgery less common, according to Islam, and other cancer drugs come with “severe side effects and inconsistent efficacy,” he says.
SpringWorks will also start a Phase 2b trial of a second ex-Pfizer drug, PD-0325901, in a genetic subset of patients with neurofibromatosis, when benign but painful tumors appear on nerve and other tissues. There are no FDA-approved drugs for the condition. PD-0325901 is what’s known as a MEK inhibitor, a type of drug that’s been approved for melanoma and shown promise in treating neurofibromas—but comes with worrisome side effects. SpringWorks aims to show its drug is safer, Islam says.
Since raising its Series A financing, SpringWorks has agreed with the FDA on the design for its coming trials, and built up its manufacturing and regulatory capabilities. It also cut a deal with Chinese cancer drug developer BeiGene (NASDAQ BGNE) to test PD-0325901 alongside a BeiGene drug, lifirafenib, in certain solid tumor types. An early-stage study is underway. SpringWorks is looking to grab rights to more targeted cancer drugs and start more studies this year, Islam says.