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SpringWorks Spins Out of Pfizer With $103M to Give Shelved Drugs New Life

Xconomy New York — 

Pfizer is testing out a new biotech experiment this morning. It has taken four drug compounds gathering dust on its shelves, and funneled them into a new startup, SpringWorks Therapeutics, that will try to develop them for diseases that don’t fit the hulking New York pharma giant’s core strategy.

This isn’t a small experiment. SpringWorks, based in New York City, is backed by a whopping $103 million Series A round from a wide range of investors, among them Bain Capital Life Sciences, OribMed Advisors, and Pfizer (NYSE: PFE) itself. Pfizer vice president Lara Sullivan has left the company to run SpringWorks along with a group of pharma veterans, such as ex-Alexion Pharmaceuticals (NASDAQ: ALXN) executives Saqib Islam (chief financial officer/chief business officer) and Stephen Squinto (head of R&D).

The company plans to develop not just the four Pfizer drugs—which are all set for either mid- or late-stage clinical trials—but also experimental therapies other pharma companies leave on the cutting room floor for one reason or another. The criteria: SpringWorks favors drugs ready for Phase 2 that it can develop for diseases with either no approved therapies, or “minimal to no competition from others,” Sullivan (pictured, left, with Islam) says. The company is also working with patient groups to help design the trials that will test each drug.

Pharma companies scrap development of experimental drugs all the time. Sometimes those drugs don’t work or are unsafe. Other times they no longer fit a company’s strategic goals, or they might be best suited for a different disease. Maybe they even lose an internal fight for interest and resources, and the cash to run larger, more expensive trials is put elsewhere.

Sullivan saw this up close at Pfizer, where she helped decide which early-stage drugs to put resources into, and which to discard or license out to someone else. Two things she and Pfizer chief medical officer Freda Lewis Hall noticed: More programs were fighting for funding than Pfizer could handle, and outside groups were increasingly interested in snapping up the drugs falling through the cracks.

“There’s just too many things,” Sullivan says. “Sometimes you want to divert them to another conveyor belt.” So they honed in on a few drug programs and made a new conveyor belt for them, SpringWorks, that Pfizer could keep a stake in while getting downstream payments and royalties if those drugs pan out.

One experimental Pfizer drug, nirogacestat (formerly PF-03084014), for instance, didn’t make the cut in breast cancer, but showed promise in a less prevalent disease that it wasn’t interested in—desmoid tumor, a benign growth in the connective tissue that affects some 900 people each year in the U.S., according to the Desmoid Tumor Research Foundation. SpringWorks is readying that drug for a Phase 3 trial in desmoid tumors.

Another drug, Senicapoc (formerly PF-05416266), failed a trial in sickle cell disease, but a researcher at Boston Children’s Hospital saw promise for the drug in rare anemias. SpringWorks is planning a mid-stage study of the drug in one of those rare anemias, hereditary xerocytosis. Two other drugs, which SpringWorks plans to test in neurofibromatosis (when benign tumors appear on nerve tissue) and post-traumatic stress disorder, were left behind as Pfizer focused its resources elsewhere, and both are headed for either mid- or late-stage trials under SpringWorks. The $103 million gives the startup the funding to run all of these studies.

Over the past several years, there have been many iterations of the idea of plucking shelved assets and developing them elsewhere. New Enterprise Associates formed orphan drug accelerator Cydan Development in 2013 so a team of experts could scour the globe for promising projects in rare diseases, sift through them, find some winners, and form companies around them. The idea behind Waltham, MA-based Tesaro (NASDAQ: TSRO) when it formed in 2011 was to buy up cancer drug candidates and rely on an expert team to develop them. Boston Pharmaceuticals was formed in 2015 with a similar concept. Ovid Therapeutics (NASDAQ: OVID) applies the approach to rare brain diseases.

Vivek Ramaswamy has built several companies—Avoxant Sciences and Myovant Sciences among them—off a plan to similarly find deep discounts in pharma’s garbage bins and develop them quickly with loads of new cash. Big Pharma often licenses out individual assets to venture firms, biotechs, specialty pharmas, and others.

Sullivan says the difference between SpringWorks and other efforts to push forward stalled pharma drugs is both its broad scope and the incentives it will hand to those it does deals with. Those incentives include, potentially, a piece of SpringWorks equity, not just downstream payments, which may help quell a company’s fear of dumping a program that may later prove very valuable, Sullivan says. “We will have the ability and structure to allow our partners to share in our future success,” she says. She wouldn’t be more specific, however.

The hope, Sullivan says, is the startup may eventually provide a “systemic solution” for stalled drug programs at Pfizer and elsewhere. But SpringWorks has to rack up some victories in clinical testing first to prove that.

There’s “a lot of great science looking for a home,” Islam says.