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East Coast Biotech Roundup: Intarcia, Atlas, Visterra, & More

Xconomy Boston — 

The oft-trodden path for a startup biotech is to aim for either a buyout or an IPO—or at minimum, a partnership with a big pharmaceutical company—before dealing with the hefty price tag of a Phase 3 study. One local biotech, however, took on the risk of bucking that trend—and succeeded. That story and much more below:

—Boston- and Hayward, CA-based Intarcia turned heads earlier this year when it bagged a whopping $200 million private equity financing round led by a group of investors like RA Capital and Farallon Capital Management. This past week, the company backed up those numbers by releasing data from two successful Phase 3 trials of a drug/device combination therapy for type 2 diabetes. ITCA 650 is a tiny, implantable pump that steadily secretes the diabetes drug exenatide to keep blood sugar levels in check. Intarcia’s hook is that patients would have the pump implanted once or twice a year to manage their blood sugar levels, rather than dealing with daily or weekly injections or the peaks and valleys in drug concentration associated with other oral and injectable therapies.

—Cambridge, MA-based Visterra raised $30 million in a Series B round that’ll help develop the company’s first drug candidates, a flu antibody called VIS410 and a dengue fever prospect named VIS513, into clinical trials. The venture arm of Merck (Merck Research Labs Venture Fund), Singapore investment fund Temasek, and its subsidiary Vertex Venture Holdings co-led the round. All are new investors, joining existing Visterra backers Polaris Partners, Flagship Ventures, Lux Capital, the Bill & Melinda Gates Foundation, and Omega Funds. Visterra is run by ex-Amag Pharmaceuticals CEO Brian Pereira. I profiled the company, which is based on a drug discovery engine developed by MIT professor Ram Sasisekharan, back in December.

—Plenty of news this past week from Atlas Venture. First, the Boston firm announced it had hired Jason Rhodes, the former president and CFO of Epizyme (NASDAQ: EPZM), as a partner in its life sciences group. Then, Atlas split itself in two. Its tech partners will start up a new, still-unnamed fund next year, while its life sciences team will keep the Atlas name. Curt Woodward has more on Atlas’s decision to split.

—Amag Pharmaceuticals’s (NASDAQ: AMAG) kidney disease drug ferumoxytol (Feraheme) has never reached the starry heights the Lexington, MA, company had hoped for—disappointing sales led to restructuring and executive turnover. This week, the company looked to rebound by acquiring formerly bankrupt Lumana Health in a deal worth around $1 billion. Amag paid $600 million in cash and $75 million in stock up front for Lumana, and tied another $350 million in potential sales milestones to the deal. In 2012 Lumana, then known as K-V Pharmaceuticals, filed for Chapter 11 in amid pricing pressure for hydroxyprogesterone (Makena), its drug for preventing preterm labor. The company emerged from bankruptcy with a new name in May, however, and the drug generated $130 million in sales over the past year—a jump of about 72 percent over the prior year.

—Novartis has backed out of hepatitis C research, and as a result, ended a $440 million partnership with Watertown, MA-based Enanta Pharmaceuticals (NASDAQ: ENTA). Enanta regained the rights to an NS5A inhibitor called EDP-239, a drug currently in Phase 1 testing for hepatitis C. Enanta has received $45 million total—$34 million up front and a $11 million milestone payment—since signing a deal with Novartis in 2012. EDP-239 is one of several hepatitis C drug prospects for Enanta, which I profiled back in January.

—New Brunswick, NJ-based Johnson & Johnson (NYSE: JNJ) agreed to pay $1.75 billion in cash for South San Francisco, CA-based Alios BioPharma. It’s a dramatic turnaround for Alios, whose most hepatitis C candidate has dealt with a series of safety problems and clinical roadblocks and was stalled by Vertex Pharmaceuticals earlier this year. J&J, however, prominently mentioned Alios’s drug for the lung infection respiratory syncytial virus (RSV), currently in Phase 2 testing, as the reason for the deal. It’s unclear what plans J&J has for Alios’s hepatitis C drugs, however, as Alex Lash reported.

—The fourth time was the charm for Watertown, MA-based pSivida (NASDAQ: PSDV). After being rejected by the FDA three times, pSivida and partner Alimera Sciences (NASDAQ: ALIM) were finally cleared to begin selling their diabetic macular edema treatment, known as Iluvien, in the U.S. PSivida will now pocket a $25 million milestone payment from Alimera, and will get 20 percent of the drug’s profits in the U.S. The two companies will launch Iluvien in the U.S. next year.

—Tarrytown, NY-based Regeneron Pharmaceuticals (NASDAQ: REGN) continued to build the case for dupilumab an antibody drug it’s developing for a variety of allergic diseases. Regeneron and partner Sanofi said the drug hit its marks in a Phase 2a proof-of-concept study for chronic sinusitis with nasal polyps, adding to successful mid-stage studies in allergic asthma and eczema.

—Another pharmaceutical company is making its way to the Hub, as Baxter International (NYSE: BAX) announced plans this past week to open a new R&D center in Cambridge, MA. The facility will be part of the pharmaceutical business Baxter is spinning out next year, which will be named “Baxalta.” The 200,000 square foot R&D center will be staffed with about 400 employees.

—New York-based Bristol-Myers Squibb (NYSE: BMY) has cut a deal with Novartis to test its cancer immunotherapy drug, nivolumab (Opdivo), in combination with three of the Swiss drugmaker’s own drugs in trials for lung cancer. Pharmas like Bristol have been cutting several of these types of deals as part of an industry-wide effort to see which cancer immunotherapy drugs work best together. Bristol also completed an application this past week with European regulators to approve nivolumab as a treatment for lung cancer. The drug is already approved in Japan for melanoma.