Impact Biomedicines closed on a $90M structured financing with Oberland Capital.
Impact Biomedicines closed on a $90 million structured financing with Oberland Capital.
The funds will be used to advance the company’s operations and infrastructure to develop and potentially commercialize fedratinib, which is being developed at first for myelofibrosis (MF) and polycythemia vera (PV). Fedratinib was abandoned by Sanofi in 2013 after patients developed Wernicke’s encephalopathy.
The company’s founder and chief executive officer is John Hood, who was the co-founder and chief scientific officer of Samumed. Before that, he was director of research and co-inventor of fedratinib at TargeGen, which was eventually acquired by Sanofi.
John Carroll, writing for Endpoints News, says, “Sanofi shelved the drug after the safety issue erupted, but now Hood—the co-inventor of the drug when he ran R&D at TargeGen, acquired by Sanofi in a $635 million deal—has also convinced the FDA that the lethal side effect researchers fretted about four years ago could be managed, getting that hold lifted.”
The financing is a little unusual. There are two milestone-based payments of $20 million each from Oberland Capital. The first is based on when the U.S. Food and Drug Administration (FDA) decides on a regulatory pathway. The second when the drug is filed. Oberland will get predefined royalties on fedratinib, if it makes it that far. If the FDA approves fedratinib, Impact can get another $35 to $50 million in predefined notes from Oberland to support the launch and commercialization.
“This financing is unique in that it will provide Impact incremental financing as it is needed and gives us flexibility with regard to our commercial strategy for fedratinib without the need for a large dilutive upfront capital raise,” said Charlie McDermott, Impact’s president and chief business officer, in a statement.
The support of the drug, which given its history raises some eyebrows, is based on data published in the journal Lancet Haematology showing results from the JAKARTA-2 Phase II clinical trial in 97 adults with intermediate or high-risk myelofibrosis who were resistant to or intolerant of ruxolitinib. There is no approved treatment for this subset of patients. The primary endpoint was spleen response and the secondary endpoint was symptom response. The trial met both endpoints and suggests that ruxolitinib-resistant or intolerant myelofibrosis patients had significant clinical benefit from fedratinib. This subset of patients is associated with a low 5-year survival rate.
“The results from this study are very encouraging because it shows that fedratinib has robust benefit for the large number of ruxolitinib-resistant or intolerant patients who have no viable second line treatment options,” said Catriona Jamieson, interim chief medical officer of Impact, in a statement. “It is our hope that fedratinib will be able to offer these patients a second chance.”
The safety concerns are probably behind the tranched equity investment, and there’s no indication what Hood has in mind to alleviate the risks that drew a clinical hold in 2013. It’s the type of business model Vivek Ramaswamy is raising millions for, although it was a recent disaster for his Axovant and its Alzheimer’s drug intepirdine that was acquired from GlaxoSmithKline for $5 million after failing four previous clinical trials. Although a high-risk strategy, it’s not unheard of for it to work—cholesterol drug Lipitor was almost abandoned by Warner-Lambert before partnering with Pfizer.
Carroll writes, “If he (Hood) pulls this off with a virtual crew and mostly non-dilutive cash where the giant Sanofi had failed, it will be one of the comeback stories of the decade.”
