Domain Associates, Regado Bet Big on Heart Drug
Biotech stars can rise and fall on the key decision of whether or not to “go it alone” and develop their drugs without the help of Big Pharma—it’s a risk that can either make or break a company. But Regado BioSciences, 12-year-old biotech startup based in Basking Ridge, NJ, and its venture backers, led by Princeton, NJ-based Domain Associates, are taking the challenge head on. They believe that the company’s two-pronged, blood clot-fighting system—which allows doctors to control the dosing of a blood-thinner in real time—has only sniffed its potential value, and they don’t want to cede any of it to a big partner just yet.
At some point soon, Regado aims to take itself public in the hopes of raising $75 million from investors. That, in itself, isn’t a big deal—several biotechs have gone public in 2013, or plan to do so at some point this year. But Regado’s reasoning is brazen: the small biotech plans to use the cash to help kickstart a 13,200-patient, 500-site, international, late-stage study for its lead drug, REG-1, on its own. Regado’s goal: to prove that giving REG-1 to patients undergoing angioplasty reduces rates of stroke and other so-called ischemic events by at least 20 percent, when compared to bivalirudin (Angiomax, manufactured by The Medicines Co. (NASDAQ: MDCO)).
“Without question, it’s clearly a complex undertaking for a biotech company,” says Regado chairman and Domain Associates partner Dennis Podlesak. “We don’t take it lightly, so we are doing everything we can—including [putting in place] what we think is a very good team in place to manage these programs.”
The decision isn’t just a blind leap of faith for Regado, or its venture backers, which include Domain (the company’s largest institutional investor, with a 19.2 percent stake), Rusnano, Aurora Funds, Quaker BioVentures, Rusnano, Caxton Life Sciences Fund, Baxter Ventures (the VC arm of Baxter International), and former Minnesota state senator and Fastenal founder Robert Kierlin, who holds 26.5 percent of the company, the biggest stake of all. They’re doing it with promising data in hand from a 640-patient, mid-stage study, which has convinced them that Regado’s REG-1 can be the proverbial next big thing in a market worth about $3 billion annually, according to the company’s S-1, filed on April 29.
The big advantage the drug has, according to Podlesak, is the amount of control doctors have over its activity.
“The clinician can turn it up or down just like you would control your thermostat,” he says.
Regado’s technology came from the labs of Duke University; Bruce Sullenger, the director of Duke’s translational research institute and the vice chair of its department of surgery, and Chris Rusconi, the head of Duke’s research program in combinatorial therapeutics, invented it in 2001. The two came up with the idea that RNA aptamers—strings of RNA letters that bind to specific molecules—could be used in tandem with drugs that prevent or dissolve blood clots, known as antithrombotics.
Domain came aboard in 2007, with Podlesak coming in as Regado’s chairman. He quickly revamped the company’s executive team, which was largely a venture capital-centric group, and brought in a group of seasoned pharmaceutical executives to run a big operation, he says.
Podlesak recruited former Aeterna Zentaris CEO Dave Mazzo to head Regado, and then added Steve Zelenkofske, who had experience running the cardiovascular units of Sanofi and Novartis, to the board. Rusconi is still part of the group, which also includes Ellen McDonald (former chief business officer at Aeterna Zentaris) and Alexander Giaquinto (former executive at Schering-Plough). Regado then moved from its home base at Duke to Basking Ridge to be within earshot of all the Big Pharma companies in New York and New Jersey.
With its pieces in place, Regado pursued its big idea: creating a line of anti-clotting drugs that give physicians performing coronary procedures the ability to precisely control, second by second, how effective the drug is. In theory, this makes a procedure such as angioplasty safer to carry out because an interventional cardiologist can boost or decrease the dose to best fit the situation, reducing the risk of a clot, heart attack, or stroke.
REG-1 is Regado’s first attempt to do just that. The system uses injections of pegnivacogin, an anticoagulant, and anivamersen, an RNA aptamer that binds to pegnivacogin, blocking its activity. Physicians can dial the clot-busting effect up or down in real time during a procedure by adjusting the relative amounts of the two drugs. According to Regado, this makes it superior to the current standard of care, injectable anticoagulants bivalirudin and heparin, because neither of those drugs have a control agent to modify their effects, and too much anticoagulation can lead to dangerous bleeding.
Regado will begin its big late-stage clinical trial in the fourth quarter of 2013, and is currently staffing up to execute it. The biotech wants to add roughly ten former pharmaceutical executives with experience running large global cardiovascular studies to work under its senior management team in medical-monitoring or clinical-operations roles. Regado hopes REG-1 can prove in the study that it is more predictable and less risky to use during angioplasties than bivalirudin, and then roll the drug out in other coronary procedures, such as open-heart surgeries and aortic valve replacements.
Regado got its first glimpse of REG-1′s potential in its mid-stage study, a 640-patient, randomized test, completed in November 2010, that compared the use of REG-1 to heparin during angioplasty. In the study, patients treated with REG-1 had a 66 percent fewer ischemic events (which include death, strokes, and heart attacks) and 60 percent fewer incidents of bleeding during the procedure, according to Regado’s S-1.
All of which is why Domain, Baxter Ventures, Rusnano and the rest of the company’s backers aren’t afraid to have the company run a massive, pricey trial on its own and fund it with an IPO—even though Regado has already raised $132 million through five rounds since 2007, according to the S-1. Regado has even rejected potential partnerships along the way.
“It would take something extraordinarily compelling for us to opt to partner it,” Podlesak says. “We think we’re creating great value with this company.”