A blood cancer drug resurrected by the scientist who helped discover the compound, and who shepherded it through years of R&D, got a shot in the arm today, in the form of a $90 million financing deal with New York’s Oberland Capital.
The financing paves the way for San Diego’s Impact Biomedicines to move forward with its plans to resume development of the drug fedratinib, Impact Biomedicines CEO John Hood (pictured above) said Wednesday.
Medicxi Partners, a venture firm backed by Johnson & Johnson, Novartis, and Verily, had already provided $22.5 million to Impact Biomedicines in a Series A financing round, the company disclosed in a statement earlier this month.
The saga that led Hood to found Impact Biomedicines last year has been a circle of life kind of story. He was a co-inventor of fedratinib, and led development of the molecule at San Diego-based TargeGen, where he was director of research from 2006 to 2008. In 2010, the French pharmaceutical giant Sanofi acquired TargeGen and assumed the task of bringing fedratinib to market. But Sanofi ended its work on the drug in 2013, after the FDA called a halt on development when some patients developed complications that raised safety concerns.
Under a so-called “structured financing,” Oberland agreed to provide Impact Biomedicines two milestone-based payments of $20 million each. Instead of taking an ownership stake in the startup, however, Oberland stands to receive predefined royalties from future fedratinib sales. Impact Biomedicines would be able to draw an additional $35 million to $50 million from Oberland if the company can win FDA approval for the drug.
The tipping point in securing the Oberland financing, Hood said, was clinical trial data published in the medical journal Lancet Haematology in July.
“There was one outstanding question on safety, and I believe we’ve addressed that now,” Hood said.
The study details the results from JAKARTA-2, which evaluated the safety and efficacy of fedratinib in 97 patients with intermediate or high-risk myelofibrosis, a rare bone marrow disorder with a grim prognosis. Hood said fedratinib elicited a stronger response rate in the patients, who were resistant to or intolerant of ruxolitnib (the only FDA-approved drug for myelofibrosis), than any other drug in any trial for myelofibrosis patients.
“Nothing else has shown the activity of fedratinib or the safety,” Hood declared.
With Oberland’s financing in hand, and the publication of finalized results, Hood and Impact Biosciences hope to revive fedratinib for the treatment of two bone marrow disorders, myelofibrosis and polycythemia vera. Blood cells proliferate out of control in patients diagnosed with the disorders. There are about 18,000 cases of myelofibrosis in the United States, and about 65,000 cases of polycythemia, Hood said.
Sanofi shelved the fedratinib program four years ago, just a few days after the FDA issued a clinical hold that was prompted by a discovery that a few patients enrolled in various fedratinib studies had developed a rare form of brain swelling usually associated with an acute deficiency of vitamin B. No cases of the brain swelling (known as Wernicke’s encephalopathy) were found in the JAKARTA-2 review, according to a spokeswoman for Impact Biomedicines.
“It was a bit of a rush to judgement,” Hood said of Sanofi’s decision on fedratinib. “The FDA put a hold on development on a Friday, and the decision to terminate the program was announced on a Monday.”
Based on the results of JAKARTA-2, Hood said, the data suggest that the brain swelling may be an effect of the myelofibrosis. “It’s not clear that the drug had any role,” he said.
The FDA has lifted its clinical hold. Now Impact Biosciences is looking for regulators to provide guidance on what, if anything, needs to be done before the company can submit a new drug application.
Fedratinib was the most advanced drug candidate under development at TargeGen when Sanofi acquired the San Diego biotech for an upfront payment of $75 million. Including prospective milestone payments and other considerations, the potential total value of the deal was $560 million at the time.
Hood led a scientific team at TargeGen that focused on discovering and developing small molecule kinase inhibitors. Fedratinib targets Janus kinase-2 (JAK-2), a marker on blood cells associated with myelofibrosis and polycythemia vera.
Hood founded Impact Biomedicines after acquiring Sanofi’s rights for the global development and commercialization of fedratinib.