Protagonist Therapeutics thinks it has solved a biological riddle, and several investors are shelling out $40 million to help test the company’s solution in humans for the first time before the end of 2015.
If that first trial goes well, Protagonist’s investors might start dreaming of a big payoff. The drug being tested is in the same therapeutic space—irritable bowel disease, or IBD—that Celgene (NASDAQ: CELG) has been spending lavishly to enter, most recently with its $7.2 billion deal to buy San Diego’s Receptos (NASDAQ: RCPT), announced Tuesday.
The Series C round, led by Canaan Partners, will pay for a Phase 1 trial, which will involve healthy volunteers. If successful, the drug PTG-100 would move on to IBD patients, whose own immune systems attack the lining of their intestines.
IBD can manifest as ulcerative colitis, with the damage centered in the colon, or as Crohn’s disease, in which the entire gastrointestinal tract can be affected. (Receptos’s lead drug, which Celgene is so eager to acquire, is in late-stage trials for ulcerative colitis and multiple sclerosis. Celgene also paid $710 million upfront last year to under-the-radar Irish firm Nogra Pharma for rights to a Crohn’s disease drug.)
With all that deal making and a lot of other competition in the IBD space, Milpitas, CA-based Protagonist thinks it can go one better with an unproven type of drug. It is developing therapeutics based on peptides that can be swallowed like pills instead of injected into the bloodstream.
Peptides are naturally occurring chains of amino acids, like proteins, but they are smaller, more fragile, and break down easily in the body. But because of their size, pharmaceutical versions of peptides can get to molecular targets that protein-based drugs, like monoclonal antibodies, can’t reach. And because of their role in nature, peptides can do things that traditional chemical drugs can’t, like disrupt two proteins that come together to cause disease.
That’s the allure of using them, with various chemical tweaks, as drugs. Several have been approved over the decades, such as the now-generic glatiramer (Copaxone) for multiple sclerosis and liraglutide (Victoza) for type-2 diabetes, and dozens are in development. One of the most ambitious programs is from Aileron Therapeutics, in Cambridge, MA, trying to attack one of cancer’s most intractable targets.
Protagonist is one of the few companies developing versions to be swallowed instead of injected. “Making them orally stable is a much higher hurdle,” says CEO Dinesh Patel (pictured), who oversees a staff of about 25 people. The drugs must run the gut’s gauntlet—acidic environment, digestive enzymes, the trillions of resident microbes—to reach their targets.
PTG-100 will aim for a target (alpha-4-beta-7 integrin) that, in an immune system gone haywire, acts as a homing device for certain immune cells to attack the lining of the gut. Shut down the signal, and the attack cools down—that’s the basic idea.
But it’s not just Protagonist’s idea. They’re going after the target because it’s already been “validated”—drug-world speak for tested and affirmed—by the antibody vedolizumab (Entyvio) from Takeda Pharmaceutical, which the FDA approved last year. (An historical note: the antibody originally came from the Cambridge, MA-based biotech LeukoSite, which was acquired by Millennium Pharmaceuticals and subsequently by Takeda.)
Julie Papanek of Canaan Partners, who is joining the Protagonist board of directors, said that such previous work was important in her decision to invest. “Protagonist has the benefit of drafting off of the clinical data generated by FDA-approved drugs like Entyvio and other a4b7 integrin inhibitors in development,” she said.
Protagonist has a second oral peptide aimed at IBD via the protein IL-23, which has become a popular target for autoimmune drugs. That drug is a bit farther behind PTG-100. The company hopes both will outpace Takeda’s approved injectable antibody and a host of other IBD competitors, not just because of the convenience of avoiding needles with an oral once-a-day dose, but because they would be safer for patients. Antibodies against autoimmune disease carry the risk of suppressing the good side of immune function, too, leaving patients vulnerable to infections.
But comparisons will take time to play out. The first glimmers of safety data for Protagonist’s oral peptides will likely emerge next year from the upcoming Phase 1 trial. Beyond that, the current $40 million round should take PTG-100 into small Phase 2 tests, but a much larger trial to prove safety and efficacy will require more funding, says CEO Patel. Protagonist also wants to develop products for diseases beyond the GI tract; those programs are farther down the road.
Another frontier in IBD treatment is the gut microbiome, the trillions of microorganisms whose interactivity with their human hosts is the subject of intensive research, and even a few forays into drug development. At least one microbiome-related drug has reached the clinic. “A time will come when there will be more simplicity and elegance in drug development by focusing on the microbiome,” said Patel. But right now, making peptides that travel through the gut to deliver a therapeutic punch is cutting-edge enough for him.
The Series C round also brings new investors Adage Capital Partners, RA Capital Management, Foresite Capital, a trio of healthcare specialist hedge funds that often take stakes in private biotechs considering a run at an IPO. Previous investors Johnson & Johnson and Eli Lilly, through their venture funds, Pharmastandard International, and Starfish Ventures also joined the round.