When Novartis signed on as a partner to Pliant Therapeutics last fall, it also agreed to eventually take an equity stake in the smaller biotech. The Swiss pharmaceutical giant made good on that commitment Tuesday, leading a $100 million investment.
Besides Novartis, the Series C round of funding adds so-called crossover investors, firms that invest in both private and public companies. Such investments are seen as a sign that a company is preparing to go public. Pliant CEO Bernard Coulie acknowledges the possibility of an IPO but adds that he can’t offer a timetable for a decision. In the nearer term, he says Pliant is pressing ahead on clinical tests that could provide additional validation for the company’s approach to treating fibrosis, a hardening and thickening of connective tissue in organs that has few treatments and can lead to organ failure.
“This will be a critical and important catalyst for the company, and I think [the investors] want to be part of that,” Coulie says.
South San Francisco-based Pliant aims to treat fibrosis by targeting a protein at the root of the disorder—-transforming growth factor beta 1 (TGF-beta 1). This protein acts as “master switch” regulating the formation of fibrotic tissue, Coulie says. Pliant is developing small molecules to block receptors for integrins, proteins that mediate the release of TGF-beta 1.
Pliant’s lead drug, PLN-74809, is currently in Phase 2a clinical trial in idiopathic pulmonary fibrosis (IPF), a form of fibrosis affecting the lungs. Coulie says the global, 84-patient study is testing different doses of the Pliant drug. Preliminary data are expected by the summer of 2021.
The Pliant drug is also being tested in primary sclerosing cholangitis (PSC), a form of fibrosis affecting the bile ducts. Coulie says a Phase 2 study of PLN-7489 in PSC is slated to start this summer.
Integrin-targeting drugs have already reached the market for other diseases, including the Biogen (NASDAQ: BIIB) multiple sclerosis drug natalizumab (Tysabri) and eptifibatide (Integrilin), a blood thinner marketed by Merck (NYSE: MRK). But Coulie notes that integrin receptors are found in organs throughout the body, which leads to side effects from integrin-blocking drugs. The Pliant drugs are designed to target only fibrotic tissue. Coulie says that means the drug’s effects are specific to the diseased organ.
Last October, Novartis partnered with Pliant on the biotech’s second-most advanced program, an experimental treatment for liver fibrosis in patients who have nonalcoholic steatohepatitis. Under the agreement, Novartis paid Pliant $80 million up front to develop and potentially commercialize the drug, PLN-1474. The deal covers up to three other Pliant drugs that also target integrins.
Pliant is conducting the Phase 1 tests of PLN-1474, research that is financed by Novartis. The pharma giant will handle further development of the compound. Depending on the drug’s progress, Pliant could earn milestone payments, and if the treatment reaches the market, royalties from sales. Novartis holds no such rights to Pliant’s other programs.
In IPF, Pliant is chasing San Francisco-based FibroGen (NASDAQ: FGEN) and Belgium-based Galapagos (NASDAQ: GLPG), both of which have drugs in late-stage development. Those companies are going after different targets than Pliant. Morphic Therapeutic is developing an integrin-targeting drug for fibrosis and other disorders. The Waltham, MA-based company has IPF and PCS drugs in preclinical development under a partnership with AbbVie (NYSE: ABBV). Others developing fibrosis drugs include miRagen (NASDAQ: MGEN) and Scholar Rock (NASDAQ: SRRK).
Pliant’s latest financing comes two years after the company raised a $62 million Series B round. Coulie says the new cash is expected to be sufficient to fund the Phase 2 tests of its lead drug in IPF and PCS. The cash will also support development of other pipeline compounds in preclinical development for other fibrotic diseases.
The financing round added new investors Redmile Group, Farallon Capital Management, Cormorant Asset Management, Surveyor Capital, and Logos Capital. Earlier investors including Eventide Asset Management, Cowen Healthcare Investments, Schroder Adveq, Menlo Ventures, SCubed Capital, Agent Capital also participated.