The rise of sophisticated market access strategies in the context of strong clinical data and unique biological targets is the result of an era where blockbuster drugs are no longer in fashion.

Targeting a unique market through regulatory exclusivity and a wide patient population that has limited drugs available for a hard-to-treat condition is one way to secure a fundraise. This is the story of UK, US and Austria-based F2G, which secured Qualified Infectious Disease Product (QIDP) for its Olorofim drug, a new antifungal agent that has been able to bring positive Phase II data where so many other drug developers have failed. In a volatile market where it is hard to raise financing, this European biopharmaceutical company, with just one asset in early-stage development, raised USD 70m earlier this year.

The company is worth highlighting for its discovery: a class of drugs called orotomides, which selectively target a key enzyme in the anti-fungal biosynthesis pathway. Compared to other marketed antifungal agents, F2G’s Olorofim has shown fungicidal activity against a broad range of mould infections. These include those where current therapies do not work because they are persistent and resistant to any therapy, thereby causing so many life-threatening infections.

The treatment is backed by years of data, even in compassionate use, making it a typical example of innovation that creates much appetite among investors. The drug has a derisked safety profile, the potential to access global patient populations and almost guaranteed healthcare reimbursement.

Yet, it would seem that such certainty is not always required by investors who boldly venture into territory that has not yet shown much promise. Such an example is Muna Therapeutics, a preclinical drug developer that was launched earlier this year to develop preclinical small molecule therapeutics for neurodegenerative diseases such as Alzheimer’s. With a USD 73m Series A financing round co-led by Novo Holdings, the Danish start-up garnered its valuation based on its merger with Belgium-based K5 Therapeutics. A major inflection point will be when its first portfolio drug for the treatment of Alzheimer’s reports Phase I safety data on or around late 2024.

Other biotech companies looking to raise financing and with substantial milestones include Scailyte, with single-cell technology and a machine learning platform that is used to identify disease biomarkers. The company has secured most of its Series A financing and is underway to prototype its lead product, an endometriosis assay panel. Women’s health bodes well for investors as an under-appreciated market which offers great expansion opportunity. It also provides a way to validate the biotech’s platform for wider use in the discovery of complex disease patterns.

Swedish biopharma SynAct is also assessing a variety of strategic options, including a partnership or licensing deal with big pharma to progress the development of its AP1189 drug candidate for rheumatoid arthritis, idiopathic membranous nephropathy, and virus-induced respiratory insufficiency. This is another example of a biopharma working with a single mechanism of action – melanocortin biology – in multiple indications.

Focusing on one area of expertise, which is then applied to a variety of therapeutic areas is becoming an all-time favourite for investors. This is because the strategy combines a non-binary, derisked pipeline backed by years of scientific discovery work on an innovative approach and biological pathway.

Proprietary intelligence

IPO

(01/09/2022)     F2G hires banks to assess IPO after potential mid-2023 US FDA approval – CEO

UK-based F2G's Olorofim drug belongs to a class of antifungal agents called orotomides which targets mould infections.

Equity story: F2G is exploring a Nasdaq listing and licensing deals as options to fund new modes of administration and for life cycle management purposes.

Milestones and technology

• Phase IIb study: efficacy in invasive aspergillosis, coccidiodomycosis and other rare moulds, to be completed this year with data due in October.
• Phase III study initiated to compare Olorofim against Gilead Sciences’ AmBisome, followed by the standard of care (SOC) in patients with invasive fungal disease (IFD) caused by invasive aspergillosis (IA); study completion expected in 2025 followed by EU filing for approval.

Competitive advantage

• It has received orphan drug status from the European Medicines Agency and orphan drug status.
• Has received Qualified Infectious Disease Product (QIDP) designation and Breakthrough Therapy designation from US FDA.
• It is planning on filing a new drug application (NDA) on the basis of US FDA Phase IIb data by the end of the year.
• The patient population is very narrow but often needs to be treated for months at a time, improving company’s revenue cycle.
• It is shifting focus to life cycle management, including inhaled and intravenous (IV) formulations.

Comparable companies/deals

• Antifungal Fosmanogepix (APX001) developed by Amplyx Pharmaceuticals was acquired by Pfizer [NYSE: PFE] in 2021 for an undisclosed amount when it was in Phase II.
• Cidara Therapeutics is awaiting approval from the US FDA for its once-weekly echinocandin, rezafungin, for the treatment and prevention of serious fungal infections, such as candidemia and invasive candidiasis.
• Cidara itself is listed in New York. It raised USD 77m in an oversubscribed 2015 IPO and has a current market capitalisation of USD 44m.

Growth funding

(22/08/2022)     VR Coach targets 2023 fundraise to bring VR addiction therapy to US market – CEO

Austrian VR Coach has developed an interactive virtual reality-based therapy program using VR headsets to treat illnesses such as anxiety, alcoholism, addiction, and other social phobias. Therapists can use its headsets to simulate social settings that prompt “problematic” emotions in patients, creating situations where patients can practice daily interactions that could otherwise trigger phobias, illnesses, or relapses.

Equity story: To power its US expansion, VR Coach is planning a EUR 8m growth funding round next year, following a EUR 1.5m fundraise with a German VC and two business angels expected to close imminently.

Milestones and technology

• It plans to have an “app on prescription” made available to addiction patients, with a focus on alcoholism, in the US and Germany.
• Market entry in Germany with priority to get on Germany’s Digital Health Applications (DiGA) list, which will enable the app to be offered on a prescription basis.
• US expansion likely next year.

Competitive advantage

• VR Coach’s headset enables a wider range of movements including moving the whole body than those of comparable companies.
• Being on the DiGA list will give it an advantage over competing services not on the list.
• It plans to roll out a franchise concept for its product: psychotherapists work with its software and VR treatments for free and VR Coach takes a commission from client payments for sessions.

Comparable companies/deals

• German-based VTplus offers user-friendly VR systems for virtual reality therapy to inpatient and outpatient providers.
• Barcelona, Spain-based Psious develops technology to treat mental illnesses.

(16/08/22)         Muna Therapeutics explores options to fund Phase I clinical trials in early 2024 amid investor interest – CEO

Danish Muna Therapeutics develops therapies to slow or stop neurodegenerative diseases including Alzheimer’s, Frontotemporal Dementia and Parkinson’s.

Equity story: It is reviewing options to fund upcoming Phase I clinical trials for its first drug, including a Series B funding round, an IPO or a partnership for one of its portfolio programmes or platform.  

Milestones and technology

• Preclinical Alzheimer’s drug to commence Phase I clinical trials in early 2024, with trials expected to last six months.
• Phase IIa study with patients undergoing treatment for six to twelve months.
• It plans to bring a further one or two new small molecule drug discovery programmes to the portfolio by YE22.

Competitive advantage

• Platform uses a combination of AI-driven computational chemistry, cell-based screening, and high-resolution target structural approaches.
• It has identified compounds that are useful for in vivo pharmacology in terms of brain exposure, a typical approach used in early CNS drug discovery to assess a compound.
• It is developing compounds that can be taken orally, while typically they are injected.

Comparable companies/deals

• No competitors with similar platforms, according to the CEO, but pointed to peers working on innovative therapies for neurodegenerative diseases: Alector [NASDAQ:ALEC], Denali Therapeutics [NASDAQ:DNLI], Vigil Neuroscience [NASDAQ:VIGL] and Cerevance.
• All three of Muna’s listed peers have joined the stock market in the past five years. Vigil’s USD 98m IPO completed in January this year, Alector raised USD 185m in 2019 and Denali Therapeutics listed in 2017 in a USD 288m IPO.

(04/08/2022)     Scailyte nears Series A close, plans CHF 15m-CHF 20m Series B – CEO

Swiss Scailyte uses single-cell technology and machine learning to identify disease biomarkers. 

Equity story: plans to complete a Series B round by the end of 2023 from investors well-versed in precision medicine, women’s health, and oncology, and could also consider a strategy investor.

Milestones and technology

• It is prototyping its lead product, an endometriosis assay panel, with an aim to finish the prototype by the end of the year.
• It will begin a clinical study of the endometriosis product next year in the US and Switzerland on 700 patients.
• It aims to file for approval with the US FDA under the in vitro diagnostics regulations by the end of 2024 and launch commercially in the US in 2025.

Competitive advantage

• Its ScaiVision platform uses machine learning to associate datasets with clinical endpoints such as disease diagnosis, progression, severity, treatment response, and toxicity response.

Comparable companies/deals

• Roche Holding [SWX:ROG] is one of the significant players in the endometriosis space.

(05/08/2022)     SynAct in talks with big pharma for partnership/licensing or takeover deal, mulls pipeline acquisitions – execs

Swedish biotech SynAct Pharma [STO:SYNACT] is developing therapies for inflammation using melanocortin biology.

Equity story: Talks with big pharma for either a takeover, partnership, or acquisition of its AP1189 drug are ongoing.

Milestones and technology

• It is evaluating AP1189 in Phase II clinical trials in rheumatoid arthritis, in idiopathic membranous nephropathy, and in virus-induced respiratory insufficiency.
• It completed Phase IIa studies for rheumatoid arthritis in 2021.
• It recently completed a Phase IIa trial in COVID-19 infected patients with encouraging results.
• It aims to find a licensor or acquiror to take AP1189 through Phase IIb and Phase III, although the company is able to complete Phase IIb itself if needed.
• It plans two Phase IIb trials in rheumatoid arthritis with 120 patients each; European trial expected to initiate recruitment in 3Q22, and second clinical trial will run both in Europe and the US.
• The two 12-week Phase IIb trials expected to be completed in 2H23.
• It has liaised with the US FDA and plans to open the IND in 3Q22 and start recruiting in 4Q22.
• It is talking to potential buyers and partners in the tier below big pharma to forge a deal for its nephrology indication as an alternative.

Competitive advantage

• SynAct’s harnesses melanocortin biology in its compound mechanism of action, which is being shown to be as effective as JAK inhibitors without the side effects.
• Results showed that its four-week treatment was effective and has no side effects.

Comparable companies/deals

• SynAct’s team was behind Danish company Action Pharma, which saw its compound AP214 for prevention of acute kidney injury acquired by Abbott [NYSE:ABT] for USD 110m in 2012.