therapeutics – Product Management Confabulation

October 20, 2021

UK startup Healx to begin clinical trial on repositioned drug for Fragile X syndrome

There are currently no approved cures for Fragile X syndrome – the most common cause of inherited intellectual disability. At the moment, the treatments are designed to manage symptoms, from anxiety to OCD or in rare cases, seizures. But a new clinical trial is soon to be underway at a UK startup.

On Wednesday, drug discovery startup Healx announced that it has gained FDA investigational new drug status for a Phase 2a clinical trial on a repositioned drug (more on this later) for Fragile X syndrome. The study, which will evaluate the effects of a non-steroidal anti-inflammatory drug on Fragile X, will begin by January 2022, per the clinicaltrials.gov registration.

Healx is one of a host of startups invested in using A.I for drug development and identification. So far, it has raised about $67 million in total funding – most recently the company closed a $56 Series B round in October 2019. Investors in Healx include Atomico, Balderton Capital, Amadeus Capital Partners, intel, Global Brain, btov partners, and angel investor Jonathan Milner.

Healx’s platform, called Healnet, uses machine learning to crawl through data on existing drugs, and potential disease targets, to find new connections. Healx’s platform can intake structured public or private data, or data that exists in other forms, like in scientific publications. Part of Healx’s approach is to use natural language processing to access data described in scientific literature.

“All of that goes into the knowledge base, and then that’s basically the force our algorithms can use for the drug matching process,” Hall tells TechCrunch. [The algorithms are] looking for the connections between the diseases, and the drugs that we can then take forward into preclinical and clinical trials.”

A.I-based Drug development is becoming a bigger piece of the A.I landscape. Funding for A.I.-based drug development skyrocketed to $13.5 billion between March 2020 and 2021, 4.5 times the amount of funding seen in 2019, according to The AI Index 2021 Annual Report by Stanford University. Though some of that was likely influenced by the race to develop Covid-19 vaccines and drugs, there have still been some significant funding rounds (take Insilico Medicine, which closed a $255m Series C round in June). Others have managed to strike deals with major pharmaceutical companies.

At the moment, Healx is focusing on rare diseases. Aside from Fragile X, the company has potential drug treatments for Pitt Hopkins syndrome in clinical planning, and 11 more candidates in preclinical development.

“We have a number of other programs that are coming along,” says Hall.

Throughout that process, Healx has also worked closely with FRAXA – a non-profit research foundation focused on Fragile X. Michael Tranfaglia, the chief scientific officer and medical director of FRAXA, notes that Healx and FRAXA have worked together even before the clinical trial process, the step when patient organizations usually become involved in research.

“What’s unusual here is that we’ve been involved throughout the entire process,” he tells TechCrunch. “We’ve been providing a lot of the information to the company that’s helped with the curation of these various datasets.”

Healx, so far, focuses on identifying drugs that already exist, rather than developing new ones – though Hall says developing new drugs isn’t off the table in the future.

Running studies on existing drugs (sometimes called drug repositioning) is far from unheard of, especially in the world of rare diseases. It lowers development costs, and has been proposed as one way to jumpstart research into rare diseases. These rare diseases are often overlooked because they can’t guarantee the same profit returns as treatments for common ailments.

Repurposed drugs, as one 2021 review paper in Trends in Pharmacological Sciences noted, can reach patients in 3-12 years, compared to the 10-15 typically expected for new drugs.

The difficulty with drug repurposing is that, in the past, it hinged somewhat on dumb luck. One 2011 paper pointed out that the next frontier in drug repurposing was “the ability to do it in a systematized and rational way as opposed to serendipity.”

Healx’s approach that happens to be artificial intelligence.

Healx’s clinical trial on potential Fragile X drugs will be the company’s first on a repositioned drug. But it has plans for more robust trials in the immediate future. Specifically, Healx sees this trial as the first phase of what the startup hopes will be an adaptive clinical study that will continue to test more drugs that have been identified by Healnet as candidates, and verified through preclinical testing.

Hall explains that there are already plans to add two more drugs to that trial — the company didn’t to name the drugs they’re testing out of fears they might inspire off label-use. He did explain, that all together, the three drugs work on three different mechanisms of action related to Fragile X syndrome.

Ultimately, the trial will evaluate how well the drugs work against two major categories of endpoints in Fragile X research: cognitive function, and anxiety-based endpoints.

It should be noted that, within the world of autism research (people with Fragile X are often also diagnosed with autism) the search for a cure, rather than a treatment, is no longer as central as it once was. For some autism is just another way of existing in the world, not something that needs a cure in the first place. Other arguments suggest that it’s society, not biology that stands in the way of neurodivergent people living happy and “normal” lives.

Studies have shown that therapy and having an environment receptive to their needs are often helpful for people with Fragile X. Drug-based treatments do play a role in managing symptoms like hyperactivity or anxiety. Still, as Tranfaglia points out, some of the symptom management drugs out there right now can be lackluster or lead to uncomfortable side effects.

For instance, children who are treated for hyperactivity might find that drugs increase their anxiety, he says.

“It’s a giant game of Whack-a-Mole where you go after one symptom and you hit that with a drug but then that ends up causing side effects in another area that makes something worse,” he says.

The future study on three different drugs may feel like it has a lot of moving parts. Healx’s approach is, as Hall puts it, to put “multiple shots on goal.” These multiple shots, notes Tranfaglia, also fits with the idea that it will likely take more than one drug to tackle rare diseases, like Fragile X.

“Ultimately we’re looking to figure out what are the best two or three drug combinations for each of these 7000 rare diseases that can be made out of these one or 200 repurposing candidates,” Tranfaglia says.

This study is still just a first step. But it will be a test of a larger trend in rare disease treatment: that drugs already in existence may make a difference, we just haven’t had the tools to find them yet.

October 1, 2021

How four-person startup Luminopia is using TV to treat lazy eye

If you’re diagnosed with lazy eye – otherwise known as amblyopia – as a child, there are only a few options at your disposal. You can wear an eye patch, you can take eye drops, or you can wear corrective lenses. Or, in the future pending FDA clearance, you could watch TV.

That’s the central idea behind Luminopia, a four-person startup headed by Scott Xiao and Dean Travers. Xiao and Travers started Luminopia six years ago as undergrads at Harvard University, and first heard about the condition from a classmate who had struggled with amblyopia as a child. Lazy eye is the most common childhood form of vision loss, and affects about 3 out of every 100 kids.

Amblyopia can develop early in life when something causes one eye to struggle to keep up with the other. There might be muscle strength imbalances between eyes, which causes one to lag behind, one eye might be far stronger than the other, or one eye might be deprived of clear vision, due to a cataract or other obstacle. Over time, the brain learns to depend upon vision in one eye, while the other gets weaker, eventually, in severe cases, leading to permanent vision loss.

The common treatments for lazy eye involve eye drops, corrective lenses, or eye patching – which strengthen the weaker eye. Luminopia’s solution is different; kids watch TV through a VR headset with the parameters of the show slightly altered (The company has struck deals with Sesame Workshop, Nickelodeon, Dreamworks and NBC to provide over 100 hours of content). Contrast might be dialed up or dialed down, or parts of each image might be removed to encourage the weaker eye to keep up with the stronger one.

“We’re actually altering the image parameters in real time, with the goal of promoting weaker eye usage and encouraging patients’ brains to combine input from both eyes,” says Xiao.

In September, the company published results of a randomized controlled trial on 105 kids. All the kids wore glasses full-time, but 51 of them also watched one hour of TV shows modified by Luminopia’s software six days per week for 12 weeks.

Overall, the kids in the treatment group improved their sight by 1.8 lines on a standard eye chart, compared to .8 lines in the comparison group (though some kids saw improvements of two or more lines at the 12 week followup visit).

The study was published in Ophthalmology.

Luminopia is still a small enterprise – there are just four employees. But the company has raised about $12 million so far with investment from Sesame Ventures (the Sesame Workshop venture capital arm), and angel investors like Robert Langer, a co-founder of Moderna (now Luminopia’s board director), and Jeffrey Dunn, the former president and CEO of Sesame Workshop.

The company has distinguished itself by its unique approach to a common problem in amblyopia, and in healthcare in general: adherence to treatment.

There’s some evidence that lazy eye treatments are hard to stick with. One study conducted in a hospital in Saudi Arabia surveyed 37 families with children who were using eyepatches to treat amblyopia. The kids in the study only completed about 66 percent of the prescribed patching time. Families cited social stigma, discomfort, and flat out refusal to wear the patch as some common reasons why they struggled to keep up with eye patching recommendations.

One 2013 study in Investigative Ophthalmology & Visual Science analyzed how well 152 kids complied with eye patch treatments, and found that on about 42 percent of days, kids skip patching all together.

Luminopia’s founders created their treatment for lazy eye by approaching the adherence problem first — a strategy borrowed from the consumer product world.

“We’ve always seen such a huge gap in the experience of things in the consumer world, where things are so thoughtful and so delightful, and healthcare where so often we see poor experiences that lead to low adherence,” says Travers.

As for kids, there aren’t much more appealing things to do than watching TV, Xiao notes. And the trial appears to prove that thesis: The kids in the study completed 88 percent of the minutes of TV watching required of them. And 94 percent of parents said they were likely or very likely to use the treatment over an eye patch.

The key, though, is to have the data and FDA approval to prove that these “delightful” treatment experiences actually work and overcome the adherence problem. Luminopia’s most recently published trial follows a single-arm pilot trial, which evaluated the technology’s at nine sites, and on a total of 84 participants. In the first phase of that pilot trial, conducted on 10 kids, the team found that children completed 78 percent of the prescribed minutes of treatment. They also saw improvements in their vision that equated to about three lines on a standard eye chart. Those results were published in Scientific Reports.

Luminopia isn’t the first company to start evaluating game or, for lack of a better word, fun-based treatments for diseases. The FDA has already been somewhat in support of other proposals in this vein.

Another company, Akili Interactive, gained FDA approval in June 2020 through the De Novo pathway for a video game used to treat ADHD in kids. That approval marked the first time the agency had approved a video game to treat a disease. In total, Akili Interactive has garnered about $301.1 million in funding, per Crunchbase.

Akili’s game, called EndeavorRx, does show a pathway to approval that Luminopia might be able to mimic. Luminopia, like EndeavorRx, is a prescription-only therapeutic service that doesn’t have a predecessor. Luminopia, says Xiao, will also follow the de novo pathway as it seeks FDA approval this year. The data from its most recent pivotal trial was submitted to the FDA last March.

“We are anticipating a decision by the end of the year, and provided it’s a positive decision, we’re looking to launch the product early this year,” he says.

September 9, 2021

Breakout “CRISPR platform” company Mammoth Biosciences is officially a unicorn

The CRISPR-based biotech startup Mammoth Biosciences is officially a unicorn, the company says.

The billion dollar valuation comes on the back of a $150 million series D round led by Redmile Group, with participation from Foresite Capital, Senator Investment Group, Sixth Street, Greenspring Associates, Mayfield, Decheng Capital, Plum Alley and NFX. Combined with a late 2020 Series C round of $45 million (which included participation from Amazon), this brings the company’s total financing to $195 million.

Mammoth Biosciences has been a major player in the CRISPR space since its founding in 2017. CRISPR, put simply, is a pair of biological scissors that can cut and replace genes in cells and living organisms, opening up the potential to perhaps permanently cure genetic disease, and perform DNA-based diagnostics.

One of the company’s four founders is one of the original discoverers of CRISPR, Jennifer Doudna, who recently won the 2020 Nobel Prize in Chemistry along with Emmaneulle Charpentier for their 2012 work demonstrating the CRISPR could be used to cut DNA. The company’s other co-founders are Janice Chen (CTO), Lucas Harrington (CSO), and Trevor Martin, (CEO).

There are a handful of other CRISPR-based companies out there, including a number that are already publicly traded. This unicorn milestone stands as a sign that Mammoth’s unique approach to CRISPR could help it distinguish itself in that landscape.

“It’s a milestone,” says Ursheet Parikh, the co-leader of Mayfield’s engineering biology investment practice. “I think the company has a long way to go from here. This round and this valuation are just signifying the promise of this stage of what the future will hold,”

Parikh says he sees Mammoth as a CRISPR “platform.” Mammoth has been discovering new types of CRISPR systems that could be used to solve specific biological problems.

“The best analog is, before you had Intel and Microsoft, if somebody wanted to build a new application, they would have to build a whole new computer function with an operating system,” says Parikh. “You don’t have to build a CRISPR solution from the ground-up. You can work with Mammoth to find the right proteins for specific problems.”

The CRISPR system most people think of when they hear the phrase is a two part mechanism called CRISPR/Cas-9. The actual molecular scissors that cut DNA (and allow for the editing to happen) is typically the Cas-9 protein. However, there’s a whole ecosystem of Cas proteins out there that can also cut DNA, and as Mammoth’s leadership argues, can do so even better in the original depending on the application.

Mammoth is creating a “CRISPR toolbox” or a collection of different Cas proteins. You could think of them as different types of scissors that each have their own specific use cases.

In August 2020, for instance Mammoth discovered a family of proteins called the Casɸ family. This family is an ultra-small version of the typical Cas9 proteins that may make it easier to develop therapies in living people, and could enhance the precision of gene-editing. Mammoth has also characterized a Cas14 system, another family of ultra-small proteins that latch on to different target sequences in the genome (like landing pads that tell Cas proteins approximately where to cut) than the Cas9 proteins do.

“Mammoth was really founded with this idea that there’s this whole universe kind of a CRISPR that goes beyond the legacy systems like Cas9,” says Martin.

The development of a CRISPR toolkit isn’t just interesting science, it’s also a smart business move for Mammoth for another reason: intellectual property ownership.

The original CRISPR/Cas9 system has been the subject of a patent battle between the University of California Berkeley, and MIT’s Broad Institute, where scientists also discovered CRISPR around the same time.

The newer Cas proteins, not part of this patent battle, allow Mammoth to completely sidestep that concern. “The patent disputes that the Broad is involved in concern legacy CRISPR-Cas9 systems. Mammoth’s systems are not Cas9-based, so they are not subject to these disputes,” Martin clarifies.

In essence, Mammoth has been building up a collection of proprietary tools that might later be put to use. Though the possibilities are nearly limitless (genetic medicine or CRISPR-based diagnostics) many of these therapeutic products don’t exist quite yet.

2020 was a big year for CRISPR therapeutics due to an influx of new clinical trials. That suggesting therapeutics are just beginning to work their way through the regulatory requirements – though approvals are still far off.

Companies like CRISPR Therapeutics and Vertex Pharmaceuticals have announced promising results from trials on CRISPR-based beta thalassemia and sickle cell treatments. And this summer, Intellia Therapeutics (another company co-founded by Doudna) and Regeneron took the field a step further, showing that CRISPR-based treatments injected directly into the body were useful in silencing a gene that causes ATTR amyloidosis, a disorder where proteins produced in the liver are misfolded (this can lead to complications, like heart failure over time).

Mammoth’s niche in the expanding world of CRISPR therapeutics, notes Martin, will be a focus on in-vivo applications (or therapies delivered in the human body) which he argues their CRISPR toolbox may enable.

“We don’t have a timeline [for potential products] on the therapeutic side but we’ll definitely be releasing more information over the next few years and we’ve been really excited about the technical results so far,” says Martin.

Diagnostics, however, is already an area where Mammoth could distinguish itself sooner rather than later. There, the company is already working with partners to create viable products.

In January, Mammoth earned funding through the The Defense Advanced Research Projects Agency (DARPA) to develop a point-of-care test that could detect up to 10 pathogens at once, and a larger, lab-based test that could detect up to 1,000. Mammoth has also received funding from the National Institutes of Health (NIH) Rapid Acceleration of Diagnostics (RADx) program to develop advanced diagnostics using CRISPR, and entered into a partnership with GSK to develop a point-of-care Covid-19 test that could detect viral RNA in about 20 minutes.

Mammoth has continued to straddle both worlds of diagnostics and therapeutics, despite “pressure” to fit into one box or the other, says Parikh. The unicorn valuation, he adds, is an additional sign that the company’s technology can operate in both worlds.

“I think what this milestone, this round, does, is validate their approach to company building, which was really to focus on an area of expertise, rather than just putting themselves in a box, of diagnostics or therapeutics,” he says.

August 17, 2021

Digital therapy program for fibromyalgia receives FDA breakthrough device designation

Swing Therapeutics, a digital therapeutics startup, has received an FDA breakthrough device designation for their 12 week smartphone-assisted fibromyalgia management program. This is the company’s first breakthrough designation, and precedes a deluge of clinical trials scheduled for this year.

Swing Therapeutics was founded in 2019 and has raised a total of $9 million in seed funding led by JAZZ Venture partners. The company is focused on managing chronic pain, and specifically fibromyalgia.

This FDA breakthrough designation was awarded to the company’s smartphone adaptation of an acceptance and commitment therapy (ACT) program originally designed and tested at the University of Manitoba. Swing Therapeutics has exclusively licensed the program, and adapted it to form their own phone-based version.

“We basically used [The University of Manitoba program] as a basis for our program and then really built on top of it, and adapted it to a sort of experience that would work great for a modern day smartphone interface,” says Mike Rosenbluth, the founder and CEO of Swing Therapeutics.

This FDA designation will allow Swing Therapeutics expedited review at the FDA as the company conducts a series of clinical trials on the product.

At the moment, there is no cure for fibromyalgia, but the FDA has approved three drugs that can help manage symptoms. Those include: Lyrica, which is usually prescribed to treat nerve damage, but is also used to treat fibromyalgia; Cymbalta, which was originally developed to treat depression, anxiety and diabetic neuropathy; and Savella, an SSRI that’s similar to treatments for depression.

Outside of the drug world, there’s some evidence ACT can help patients who live with chronic pain (including fibromyalgia).

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One meta-review of 25 studies on ACT and chronic pain, for instance, found that ACT therapy had small effects on pain intensity. But the therapeutic process of teaching patients to accept their pain (but not ignore it) was linked with moderate and long-term improvements in depression, anxiety and quality of life.

“What ACT does is it tries to help people accept those symptoms and things that are uncontrollable. It helps people think about their values – what is really important to them,” says Rosenbluth. “And then they try to make behavior-based changes aligned with those values.”

In that vein, Swing Therapeutics’ platform is designed to be prescribed by a doctor as a treatment management tool. Once prescribed, the patient would enter a 41 session acceptance and commitment therapy program that’s run entirely on their phone, and broken into “daily doses.” A “daily dose” might include a prompt for a mindfulness session or a short writing prompt.

The University of Manitoba program that Swing’s smartphone program is based on does have a randomized controlled trial to its name. It was initially validated in a study on 67 participants who either received treatment as usual or their regular treatment plus ACT delivered via an 8-week online course.

Completing the course was linked with improvements in depression symptoms and improvements in patients’ scores on the Fibromyalgia Impact Questionnaire (FIQ-R), which measures the effects of fibromyalgia on sleep, pain perception fatigue, or psychological distress. The course appeared to help patients improve their “pain acceptance” and through that mechanism the experience of fibromyalgia.

Importantly, the Swing Therapeutics program does differ slightly from the University of Manitoba program – namely, it’s designed for almost daily use, over 12 weeks on a smartphone, as opposed to 8 weeks on a computer. Even these small changes warrant their own independent clinical trials to ensure this approach also helps fibromyalgia patients benefit from this specific ACT therapy program.

Swing Therapeutics has several of these clinical trials at different stages.

This spring, Swing completed enrollment of a 67-person pilot study on their adapted treatment for fibromyalgia (patients were assigned to an active control or the ACT digital therapy). This study is ongoing. Last week, Swing also launched a large-scale study called REACT-FM. This study, currently recruiting, aims to enroll about 100 to 150 patients who will use the ACT product for two weeks.

Finally, the company is also in the development phase for a Phase 3 randomized controlled trial. After completion of that study, the company plans to submit to the FDA for full approval of the platform. That study, says Rosenbluth, is planned to launch at the end of the year.

The FDA breakthrough therapy designation has already helped shape these studies. As the trials continue, this designation means the device will continue to enjoy expedited review, which could smooth the platform’s journey through clinical trials.

“We found it really useful to be able to have that channel dialogue with the FDA, so that we can make sure that we’re aligned in clinical study design and our approaches are in line with things that the FDA expects,” Rosenbluth says.

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August 3, 2021

Rani Therapeutics’ $73M IPO will fund upcoming clinical trials

Rani Therapeutics, a San Jose-based company developing a pill to replace medical injections, went public on Friday.

According to S-1 filings, shares were estimated to price between $14 and $16 last week. On Friday, shares debuted slightly lower, around $11. Rani raised about $73 million in its debut.

Rani’s debut comes amidst a flurry of IPO activity in therapeutics. In 2020, 71 biotech companies went public. Already in 2021, 59 companies have IPO’ed and even more are on the way. On July 30 alone, eight different biotech companies are expected to begin trading, including Rani Therapeutics.

Rani Therapeutics, is, as Imran puts it “laser focused” on itself, rather than the IPO activity around it. The decision to go public was partially bolstered by the results of a phase I study– early evidence that the RaniPill, the company’s flagship product could be brought into the clinic.

“We are already in humans, and clearly on a strong path to make oral biologics [a] reality. This is a hot and unique market for life science direction and we’re excited to be driving innovation in this area,” Imran tells TechCrunch.

Rani Therapeutics flagship product is RaniPill, essentially, a capsule designed to deliver medicines that would usually be delivered via injections. TechCrunch covered the pill in more detail here, but it works according to a few basic steps.

The pill is covered by a coating resistant to stomach acid. Once the pill enters the small intestine, the coating dissolves, allowing for a small balloon to inflate. Once that small balloon inflates, medication is delivered by a microneedle (which dissolves after the drug is administered). Then, the rest of the balloon is “excreted through normal digestive processes,” per the company’s S-1 filing.

This whole process occurs in a pill that, on the outside, looks like a gel capsule.

There is evidence for some conditions suggesting patients prefer oral drugs to injections: for example, studies on cancer patients have illuminated patient preference for oral therapies rather than regular injections. That’s not the case for every condition. Some patients show preference long-acting medicines delivered via injection rather than having to take lots of pills (this is the case in for some HIV patients).

However, it’s fair to say that needles aren’t exactly pleasant. A 2019 review and meta analysis of 35 studies found that between 20 and 30 percent of young adults are afraid of needles, a fear which can lead some people to avoid medical treatments or vaccines.

Rani Therapeutics has been developing capsules for drugs that have already been approved by the FDA, but are often administered via regular injections. They include:

Octreotide for acromegaly or neuroendocrine tumors in the GI tract (NETs)
TNF-alpha inhibitors for psoriatic arthritis
Parathyroid hormone (PTH) for osteoporosis
Human growth hormone (HGH) for HGH deficiency
Parathyroid hormone for hypothyroidism

The product furthest along in the research cycle is the pill developed to administer octreotide (called RT-101), which was tested in a phase I clinical trial on 62 participants. The trial results, partially reported in the S-1 filing, showed 65 percent bioavailability of the octreotide drug, compared to an injection. That suggests that the pills can get the drugs into the body efficiently, though these results are early.

Next year, the company plans to initiate two additional Phase I studies on PTH for osteoporosis, and human growth hormone. Studies on the rest of the drugs in the pipeline are scheduled for 2023.

Ultimately, the company’s goal is to validate the RaniPill independently of specific drugs. The company is pursuing an Investigational Device Exemption (IDE), which would allow the company to test RaniPill in a clinical study without a drug involved. This study aims to establish how safe the product is for repeated dosing, and is slated to begin next year.

“I think we want to continue to generate data with drugs, because we will be making drugs. But nonetheless, it’s important to establish what the platform’s safety and tolerability is,” said Imran. So that’s quite important as well.”

The company’s leadership does have a track record of successful exits in the biotech space.

Rani Therapeutics was founded in 2012 by Mir Imran, a founder who has already overseen several exits and acquisitions of medical device companies. In 1985, Imran developed an implantable cardiac defibrillator as part of his first company, Intec Systems, which was later acquired by Eli Lilly. Since, he has started 20 different medical device companies, of which 15 have either IPOed or been acquired.

However, for now, Rani Therapeutics financials report significant losses. Net losses for 2019 and 2020 totaled $26.6 million and $16.7 million, respectively. As of March 2021, the company was running a deficit of $119.6 million.

In total, the company has raised about $211.5 million in funding since inception, without counting cash generated from today’s IPO. RaniTherapeutics has plans to use the $73 million raised during the IPO to fund the IDE study and pursue additional clinical trials.

July 22, 2021

Shares of protein discovery platform Absci pop in market debut

Absci Corp., a Vancouver company behind a multi-faceted drug development platform, went public on Thursday. It’s another sign of snowballing interest in new approaches to drug development – a traditionally risky business.

Absci focuses on speeding drug development in the preclinical stages. The company has developed and acquired a handful of tools that can predict drug candidates, identify potential therapeutic targets, and test therapeutic proteins on billions of cells and identify which ones are worth pursuing.

“We are offering a fully-integrated end-to-end solution for pharmaceutical drug development,” Absci founder Sean McClain tells TechCrunch. “Think of this as the Google index search for protein drug discovery and biomanufacturing.”

The IPO was initially priced at $16 per share, with a pre-money valuation of about $1.5 billion, per S-1 filings. The company is offering 12.5 million shares of common stock, with plans to raise $200 million. However, Absci stock has already ballooned to $21 per share as of writing. Common stock is trading under the ticker “ABSI.”

The company has elected to go public now, McClain says, to increase the company’s ability to attract and retain new talent. “As we continue to rapidly grow and scale, we need access to the best talent, and the IPO gives us amazing visibility for talent acquisition and retention,” says McClain.

Absci was founded in 2011 with a focus on manufacturing proteins in E.Coli. By 2018, the company had launched its first commercial product called SoluPro – a biogeneered E.Coli system that can build complex proteins. In 2019, the company scaled this process up by implementing a “protein printing” platform.

Since its founding Absci has grown to 170 employees and raised $230 million – the most recent influx was a $125 million crossover financing round closed in June 2020 led by Casdin Capital and Redmile Group. But this year, two major acquisitions have rounded out Absci’s offerings from protein manufacturing and testing to AI-enabled drug development.

In January 2021, Absci acquired Denovium, a company using deep learning AI to categorize and predict the behavior of proteins. Denovium’s “engine” had been trained on more than 100 million proteins. In June, the company also acquired Totient, a biotech company that analyzes the immune system’s response to certain diseases. At the time of Totient’s acquisition, the company had already reconstructed 4,500 antibodies gleaned from immune system data from 50,000 patients.

Absci already had protein manufacturing, evaluation and screening capabilities, but the Totient acquisition allowed it to identify potential targets for new drugs. The Denovium acquisition added an AI-based engine to aid in protein discovery.

“What we’re doing is now feeding [our own data] into deep learning models and so that is why we acquired Denovium. Prior to Totient we were doing drug discovery and cell line development. This [acquisition] allows us to go fully integrated where we can now do target discovery as well,” McClain says.

These two acquisitions place Absci into a particularly active niche in the drug development world.

To start with, there’s been some noteworthy fiscal interest in developing new approaches to drug development, even after decades of low returns on drug R&D. In the first half of 2021, Evaluate reported that new drug developers raised about $9 billion in IPOs on Western exchanges. This is despite the fact that drug development is traditionally high risk. R&D returns for biopharmaceuticals hit a record low of 1.6 percent in 2019, and have rebounded to only about 2.5 percent, a Deloitte 2021 report notes.

Within the world of drug development, we’ve seen AI play an increasingly large role. That same Deloitte report notes that “most biopharma companies are attempting to integrate AI into drug discovery, and development processes.” And, drug discovery projects received the greatest amount of AI investment dollars in 2020, according to Stanford University’s Artificial Intelligence Index annual report.

More recently, the outlook on the use of AI in drug development has been bolstered by companies that have moved a candidate through the stages of pre-clinical development.

In June, Insilico Medicine, a Hong Kong-based startup, announced that it had brought an A.I-identified drug candidate for idiopathic pulmonary fibrosis through the preclinical testing stages – a feat that helped close a $255 million Series C round. Founder Alexander Zharaonkov told TechCrunch the PI drug would begin a clinical trial on the drug late this year or early next year.

With a hand in AI and in protein manufacturing, Absci has already positioned itself in a crowded, but hype-filled space. But going forward, the company will still have to work out the details of its business model.

Absci is pursuing a partnership business model with drug manufacturers. This means that the company doesn’t have plans to run clinical trials of its own. Rather, it expects to earn revenue through “milestone payments” (conditional upon reaching certain stages of the drug development process) or, if drugs are approved, royalties on sales.

This does offer some advantages, says McClain. The company is able to sidestep the risk of drug candidates failing after millions of R&D cash is poured into testing and can invest in developing “hundreds” of drug candidates at once.

At this point, Absci does have nine currently “active programs” with drugmakers. The company’s cell line manufacturing platforms are in use in drug testing programs at eight biopharma companies, including Merck, Astellas, and Alpha Cancer technologies (the rest are undisclosed). Five of these projects are in the preclinical stage, one is in Phase 1 clinical trials, one is in a Phase 3 clinical trial, and the last is focused on animal health, per the company’s S-1 filing.

One company, Astellas, is currently using Absci’s discovery platforms. But McClain notes that Absci has only just rolled out its drug discovery capabilities this year.

However, none of these partners have formally licensed any of Absci’s platforms for clinical or commercial use. McClain notes that the nine active programs have milestones and royalty “potentials” associated with them.

The company does have some ground to make up when it comes to profitability. So far this year, Absci has generated about $4.8 million in total revenue – up from about $2.1 million in 2019. Still, the costs have remained high, and S-1 filings note that the company has incurred net losses in the past two years. In 2019, the company reported $6.6 million in net losses in 2019 and $14.4 million in net losses in 2020.

The company’s S-1 chalks up these losses to expenditures related to cost of research and development, establishing an intellectual property portfolio, hiring personnel, raising capital and providing support for these activities.

Absci has recently completed the construction of a 77,000 square foot facility, notes McClain. So going forward the company does foresee the potential to increase the scale of its operations.

In the immediate future, the company plans to use money raised from the IPO to grow the number of programs using Absci’s technology, invest in R&D and continue to refine the company’s new AI-based products.

June 9, 2021

“Alzheimer’s is open for business:” Controversial FDA approval could pave the way for future drugs

On Monday, a 17-year drought in the world of Alzheimer’s drugs ended with the FDA approval of Biogen’s Aduhlem (aducanumab). The controversy behind the FDA’s decision was considerable, but it doesn’t seem to be spooking drug developers who are now narrowing in on the degenerative brain disease.

In a nutshell, the approval of Aduhelm came after conflicting results from clinical trials. In November 2020 an independent FDA advisory board did not recommend that the agency endorse the drug, but in June, the agency approved the drug anyway via an Accelerated Approval Program.

Aduhelm is now the first novel treatment to address one underlying cause of Alzheimer’s – beta-amyloid plaques that accumulate in the brain.

The drug received support from patient and industry groups (the FDA also noted that the “need for treatment is urgent”, in a statement explaining the agency’s choice). Still, there have been a number of doctors who have expressed concern. One member of the expert committee that voted not to recommend the approval of Aduhelm back in November has resigned since the announcement.

However, the inconsistency of the science and highly public debate around the approval of Aduhelm doesn’t seem to have halted enthusiasm within the pharmaceutical industry. Rather, it may signal a new wave of additional treatments in the next few years, which will piggyback off of the approval of Aduhelm (however controversial that approval may be).

“This is great news for investors and for drug companies that are working towards new drugs,” says Alison Ward, a research scientist at the USC Schaeffer Center for Health Policy and Economics.

Historically there have been a few factors that have made the development of a drug for Alzheimer’s an uphill battle.

The first, is a 17-year history of failure to bring a drug through clinical trials. Even Biogen’s clinical trials for Aduhelm were halted in 2019 because it wasn’t clear that they would reach their clinical endpoints (effectively, the target outcomes of the trial). In fact, Aduhlem was approved based on a “surrogate endpoint,” the decline of beta-amyloid, not the primary endpoint, cognitive function.

Trials for Alzheimer’s drugs have also historically been expensive. A 2018 paper in Alzheimer’s and Dementia: Translational Research and Clinical Interventions (a journal run by the Alzheimer’s Association) estimated that the cost of developing an Alzheimer’s drug was about $5.6 billion. By comparison, the mean investment needed to bring a new drug to market is about $1.3 billion according to analysis of SEC filings for companies that applied for FDA approval between 2009 and 2018 (though the median cost was about $985 million). Older estimates have put the costs of bringing a drug to market at $2.8 billion.

For Alzheimer’s specifically, Phase 3 trials are still largely sponsored by industry, but over the past five years, trials sponsored solely by the industry have decreased. Government grants and funding via public-private partnerships have made up an increasing share of available funds.

Martin Tolar, the founder CEO of Alzheon, another company pursuing an oral treatment for Alzheimer’s (currently in a phase 3 clinical trial), says that attracting other forms of funding was a challenge.

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“It was impossible to finance anything,” he says. “It was impossible to get Wall Street interested because everything was failing one after the other after the other.”

He expects this recent approval of Aduhelm to change that outlook considerably. Already, we are seeing some increased interest in companies already in phase 3 clinical trials: After the FDA announcement, shares of Eli Lilly, also running a phase 3 clinical trial, surged by 10 percent.

“I’ve had probably hundreds of discussions, of calls, from bankers, investors, collaborators, pharma, you name it,” Tolar says. “Alzheimer’s is open for business.”

With renewed interest and what appears like a pathway to approval at the FDA, the environment for the next generation of Alzheimer’s drugs seems to be ripening. Right now, there are about 130 phase 3 clinical trials on Alzheimer’s drugs that are either completed, active or recruiting.

Tolar sees the FDA decision, based on imperfect data, as a “signal of urgency” to approve new treatments that are imminent arrivals.

As Ward pointed out in a white paper on in-class drug innovation, “follow on” drugs go on to become leaders in the industry, especially if they demonstrate better safety or efficacy than the drug that was first to market. That, the paper argues, suggests drug approval may “pave the way” for more effective drugs in the future.

In the case of Alzheimer’s, it might not be one drug that dominates, even as more get approved, she notes. Rather, a cadre of new, approved drugs may go on to compliment one another.

“The way that the medical community is thinking of AD [Alzheimer’s Disease] now is that it’s likely going to be a combination of drugs or a cocktail of drugs that comes together to have true success at delaying progression,” she says.

“If we’re looking to treat AD with a cocktail of drugs, history suggests it’s individually approved drugs that come together to make those drug cocktails.”

There are still some potential pitfalls for future drugs to consider. One argument is that with an approved drug available, it may be more difficult to recruit participants in clinical trials, slowing the pace of drug discovery. In that respect, Ward argues that this will ultimately be dwarfed by patients who will now look into a potential diagnosis for Alzheimer’s now that there’s something to treat it with.

There’s also the fact that Aduhelm’s costs are high (about $56,000 for a year’s supply, the brunt of which will be borne by Medicare), and the data remains questionable. Those factors may push patients towards other drugs, even if they’re in clinical trials.

Additionally, there is the question of how well Aduhelm actually performs during the critical followup study mandated by the FDA as a condition of the drug’s approval. Whether Aduhelm can truly slow cognitive decline, as well as help address levels of beta-amyloid from the brain, remains questionable based on current data.

Still, Tolar doesn’t see the results of that study as particularly relevant because the industry will have moved on. Biogen CEO Michel Vounatsos has said it may not share results of this trial for as many as nine years, though he noted the company would try to deliver data sooner.

“There will be better drugs by then,” Tolar predicts.

Tolar’s phase 3 clinical trial just began dosing this week, and is scheduled to end by 2024.

Biogen and Esai will likely also have another drug ready for evaluation by then, as two phase 3 clinical trials for another beta-amyloid antibody treatment called lecanemab are scheduled for completion by 2024 and 2027.

The signal sent by Monday’s approval may be a pathway for future drugs, rather than an end itself. The data is imperfect, the costs high, and the controversy considerable, but the band-aid has been ripped off.

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March 5, 2021

How Rani Therapeutics’ robotic pill could change subcutaneous injection treament

A new auto-injecting pill might soon become a replacement for subcutaneous injection treatments.

The idea for this so-called robotic pill came out of a research project around eight years ago from InCube Labs—a life sciences lab operated by Rani Therapeutics Chairman and CEO Mir Imran, who has degrees in electrical and biomedical engineering from Rutgers University. A prominent figure in life sciences innovation, Imran has founded over 20 medical device companies and helped develop the world’s first implantable cardiac defibrillator.

In working on the technology behind San Jose-based Rani Therapeutics, Imran and his team wanted to find a way to relieve some of the painful side effects of subcutaneous (or under-the-skin) injections, while also improving the treatment’s efficacy. “The technology itself started with a very simple thesis,” said Imran in an interview. “We thought, why can’t we create a pill that contains a biologic drug that you swallow, and once it gets to the intestine, it transforms itself and delivers a pain-free injection?”

Rani Therapeutics’ approach is based on inherent properties of the gastrointestinal tract. An injecting mechanism in their pill is surrounded by a pH-sensitive coating that dissolves as the capsule moves from a patient’s stomach to the small intestine. This helps ensure that the pill starts injecting the medicine in the right place at the right time. Once there, the reactants mix and produce carbon dioxide, which in turn inflates a small balloon that helps create a pressure difference to help inject the drug-loaded needles into the intestinal wall. “So it’s a really well-timed cascade of events that results in the delivery of this needle,” said Imran.

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Despite its somewhat mechanical procedure, the pill itself contains no metal or springs, reducing the chance of an inflammatory response in the body. The needles and other components are instead made of injectable-grade polymers, that Imran said has been used in other medical devices as well. Delivering the injections to the upper part of the small intestine also carries little risk of infection, as the prevalence of stomach acid and bile from the liver prevent bacteria from readily growing there.

One of Imran’s priorities for the pill was to eliminate the painful side effects of subcutaneous injections. “It wouldn’t make sense to replace them with another painful injection,” he said. “But biology was on our side, because your intestines don’t have the kind of pain sensors your skin does.” What’s more, administering the injection into the highly vascularized wall of the small intestine actually allows the treatment to work more efficiently than when applied through subcutaneous injection, which typically deposits the treatment into fatty tissue.

Imran and his team have plans to use the pill for a variety of indications, including the growth hormone disorder acromegaly, diabetes, and osteoporosis. In January 2020, their acromegaly treatment, Octreotide, demonstrated both safety and sustained bioavailability in primary clinical trials. They hope to pursue future clinical trials for other indications, but chose to prioritize acromegaly initially because of its well-established treatment drug but “very painful injection,” Imran said.

At the end of last year, Rani Therapeutics raised $69 million in new funding to help further develop and test their platform. “This will finance us for the next several years,” said Imran. “Our approach to the business is to make the technology very robust and manufacturable.”

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