“We are pleased with this vote of confidence from the Transition Therapeutics shareholders as it underscores their confidence in our ability to leverage the potential of Transition Therapeutics’ clinical programs and the opportunity for shareholders of Transition Therapeutics to participate in the continued growth and development of OPKO’s strong pipeline,” said Phillip Frost, M.D., CEO and Chairman of OPKO Health. “This acquisition provides OPKO with two late stage drug candidates, each of which holds exceptional market potential and complements OPKO’s development pipeline.”
About Transition Therapeutics
Transition Therapeutics is a biopharmaceutical development company advancing novel therapeutics for CNS, metabolic diseases and androgen deficiency indications. The company’s wholly-owned subsidiary, Transition Therapeutics Ireland Limited, has two development programs: CNS drug candidate ELND005 for the treatment of Alzheimer’s disease and Down syndrome; and selective androgen receptor modulator drug candidate TT701. Transition’s lead metabolic drug candidate is TT401 for the treatment of type 2 diabetes and accompanying obesity. For additional information about the Company, please visit www.transitiontherapeutics.com.
Durham, NC-based Novan set a preliminary target of $60 million for the IPO, a figure that may change as the company works through how many shares it will sell and at what price. In its prospectus filed with securities regulators on Wednesday, Novan says proceeds from the stock offering would fund its lead drug, a topical gel for acne known as SB204, all the way through an application for FDA approval, and help push four other compounds in its pipeline forward, as well. The company has applied for a Nasdaq listing under the stock symbol “NOVN.”
The IPO filing comes eight months after Novan raised more than $30 million for late-stage clinical trials. SB204 is in two Phase 3 clinical trials for acne that should produce data in early 2017. If all goes well in those trials and Novan completes a planned long-term safety study, the company could apply for FDA approval by the end of next year. Data from mid stage trials of another drug, SB206, a gel being studied as a treatment for the warts caused by human papillomavirus (HPV), are expected later this year.
The dermatology market was $28 billion in 2014, Novan says, citing IMS Health data. But Novan says innovation in dermatology has been stagnant and some treatments for skin conditions, such as antibiotics, raise concerns about contributing to drug resistance. Novan believes its drugs can provide an alternative to such acne treatments.
Novan says it has figured out a way to administer nitric oxide, a volatile compound that is normally a gas, in a solid form. The compound has been researched in applications such as treating microbial diseases and managing inflammation. Right now, the only FDA-approved use of nitric oxide is the treatment of newborns who have pulmonary hypertension, or high blood pressure in the arteries to their lungs. Nitric oxide is administered from a gas tank in this setting, which makes it difficult to use as a treatment for other types of diseases.
By storing nitric oxide in a solid form, Novan says its “nitric oxide on demand” technology, called Nitricil, can be used to form new drugs that make delivery of the compound stable, targeted, and safe. Novan says it has a library of more than 200 Nitricil compositions, each with a unique way of releasing nitric oxide. The company says it focused on dermatology because its technology can work with the body’s own nitric oxide producing capabilities; each of the skin’s three layers release can produce and release nitric oxide at different rates.
“Our platform allows us the ability to tune the release profile of nitric oxide and trigger its wide range of beneficial effects when host systems fail or are overwhelmed by invading microorganisms,” the company says in its filing.
Nitricil was originally developed in the laboratory of Mark Schoenfisch, a chemistry professor at the University of North Carolina at Chapel Hill. Schoenfisch co-founded Novan in 2008 with Nathan Stasko, who was one of his graduate students. Stasko is now the president and CEO of the company, which has an exclusive license from UNC to develop and commercialize the nitric oxide technology.
Novan has spent more than $64 million on R&D since its inception, according to the filing, and has taken an unusual financing path for a biotech. Rather than rely on venture capitalists for funding, the company’s first outside investment came from Neal Hunter, the co-founder and former CEO of Durham LED technologies company Cree (NASDAQ: CREE). Novan’s work has since been funded primarily by
wealthy individuals, many of them introduced to the company by Hunter, who became chairman of Novan’s board of directors. Speaking at UNC’s Kenan Flagler Business School in April 2015, Hunter said that the company’s first $40 million was raised from angel investors in North Carolina’s Research Triangle. “What does that say about the Triangle? [There is] a lot more money around here than we think,” he said.
Novan brought on its first institutional investment in March 2015, when it raised $50 million led by Malin (ISEQ: MLC), an Ireland-based life sciences investment company. Hunterstepped down from the board in February after the closing of Novan’s most recent financing, which topped $32 million. A securities filing shows that 172 investors participated in that December 2015 round, suggesting that the company stuck with its strategy of raising money from individuals rather than institutions. Malin is Novan’s largest shareholder, with a 16.25 percent stake, according to the prospectus. Hunter owns 13.83 percent of the company.
Novan didn’t start out as a dermatology company. It initially aimed to use its technology as an antimicrobial coating for medical devices, which Stasko told me in 2009 would be the fastest way to market. Medical devices featuring Novan’s nitric oxide technology may yet reach the market, but under a different company. In its filing, Novan disclosed that late last year it formed a separate, privately held company called KNOW Bio and gave it Novan’s non-dermatological assets, intellectual property valued at $1.8 million. Novan also provided the new company with $5.2 million in working capital.
Any new investors in Novan won’t have a stake in any non-skin products that emerge from the new company. But Novan does have the right of first negotiation to license from Know Bio any dermatology-related technology the new company develops within three years of the separation agreement.
Novan’s filing comes as biotech IPOs haven’t been quite as easy to pull off as they were during the boom from 2013 through 2015, according to Glen Giovannetti, global biotechnology leader at Ernst & Young. Speaking in Durham Wednesday at an event to launch the firm’s annual Beyond Borders report on the life sciences industry, Giovannetti said the IPO window is not shut, but companies that successfully go public are doing so with significant insider participation in the stock offering. “Deals can still get done but it’s a much more challenging environment,” Giovannetti said.
Examples of recent biotech stock offerings that required inside help include the $70 million IPO of Watertown, MA-based Selecta Biosciences (NASDAQ: SELB) and Syros Pharmaceuticals (NASDAQ: SYRS), a Cambridge, MA-based biotech that raised $50 million in its IPO.
Novan does not yet have any FDA-approved products. The company has previously received revenue from government contracts, including a National Institutes of Health grant to study Nitricil for antimicrobial catheter coatings, as well as a Department of Defense contract to research the technology as a potential topical wound treatment for the military.
As of June 30, Novan had $19.6 million in cash. Even if Novan raises $60 million in its IPO, it will need more money to bring its products to market. Novan spent $22.3 million on R&D in the first half of 2016, more than double its R&D costs for the same period last year. Besides the acne and HPV drugs, Novan is also studying drug candidates for fungal infections of the skin and nails, psoriasis, and eczema.
Fabior (tazarotene) Foam, 0.1% is a patent-protected topical product indicated for the treatment of acne, the largest dermatology indication in the US affecting up to 50 million Americans every year1. Sorilux (calcipotriene) Foam, 0.005% is a patent-protected topical product indicated for mild to moderate plaque psoriasis affecting up to 6 million Americans each year1.
Both Fabior and Sorilux will be marketed through Mayne Pharma’s Specialty Brands Division and existing sales team. Re-launch for both products is expected in FY17. During the intervening period GSK will continue to distribute Fabior and Sorilux under a transition services arrangement.
The non-US dermatology assets will continue to be distributed by GSK in the short term and Mayne Pharma will seek to out-license these products to new partners.
Rationale for the acquisition
Mayne Pharma’s CEO, Mr Scott Richards said “This acquisition will strengthen Mayne Pharma’s position in the US dermatology market, diversify future branded earnings and create new opportunities for growth. Both Fabior and Sorilux are a strategic fit with the existing Doryx franchise and participate in attractive and growing markets. We believe both products are differentiated assets with compelling clinical data that physicians and patients will appreciate.”
“Mayne Pharma is very attracted to the underlying fundamentals of the US dermatology market. The acquisition will leverage existing commercial infrastructure across functions including sales and marketing, customer service, compliance, medical affairs and contracts administration. We also expect to leverage the new foam capability in future branded and generic product development programs.”
Mayne Pharma expects the products to contribute modest incremental EBITDA in FY17 and have significant potential for growth in future years.
“The addition of ON Light Sciences’ innovative technology allows us to better meet the needs of aesthetic practices that focus on energy-based devices,” said Philip Burchard, CEO of Merz Pharma Group. “We have a vision to be the most innovative company in aesthetics, and this acquisition clearly complements our growing and diversified global portfolio, which includes the Ultherapy® and Cellfina™ devices.”
The DeScribe® Transparent PFD Patch is placed over tattoos prior to irradiation, allowing physicians to treat tattoos more efficiently by enabling rapid multiple laser passes in a single treatment session. It also provides significant optical clearing of tissue, protects the epidermis and inhibits potentially infectious back-splatter and fumes. In a recent clinical trial1, laser tattoo removal patients reported not only less discomfort, but faster healing post-treatment with the DeScribe® Transparent PFD Patch.
“Merz North America’s robust aesthetic portfolio continues to strategically grow through innovative products addressing conditions with fast growing demand such as tattoo removal. This latest addition to our offerings underscores the strong commitment we have to growing our US business by responding quickly to market demands,” Merz North America President and CEO Bill Humphries said.
Tattoo removal is one of the fastest-growing laser procedures (109,641 performed in 2014), up 74 percent since 2012, as reported by the American Society of Dermatologic Surgery (ASDS), and new developments in medical device technology are encouraging more individuals to consider tattoo removal procedures more seriously.
Market research indicates that an increase in tattoo prevalence is correlated with rising levels of “tattoo regret.” According to a July 2015 study conducted by laser manufacturer Syneron-Candela, 33% of tattoo wearers in the US have at least one tattoo they would consider removing or would definitely like to have removed.
“We look forward to joining Merz and expanding awareness and use of the DeScribe Transparent PFD Patch. We share Merz’s commitment to innovation that directly and positively impacts patient health and welcome the opportunity to be part of its strong product line-up.” David Sell, President and CEO of ON Light Sciences said.
“Merz continues to actively seek opportunities to partner with or acquire companies such as ON Light Sciences,” said Hans-Jörg Bergler, Head of Corporate Development for Merz Pharma Group. “Through a focused corporate development strategy and our Merz Corporate Venture Capital Initiative, we remain actively engaged in funding innovative and category-building technologies within the aesthetics space.”
Current OLS customers should continue to place product orders via the ON Light Sciences’ website at www.onlightsciences.com.
The South Carolina Biotechnology Industry Organization (SCBIO) will work with the South Carolina Department of Commerce on a strategic plan that includes attracting more life sciences sectors to the state, says Wayne Roper, president of SCBIO, which was formed in 2004 and became a self-sustaining membership-driven trade association six years ago.
“We have the expertise and the interest in developing the job,” Roper says. “We know how to get the most bang for our buck in economic development.”
The partnership will begin with an inventory of life sciences companies and assets in the state, including on-site visits to pharmaceutical, medical device, research, diagnostic and medical equipment companies and their suppliers.
Next, SCBIO and state officials will identify opportunities to attract more human life-sector companies to the state, and then they’ll support the commercialization of research for South Carolina universities, Roper says.
The state is developing expertise in biopharmaceutical manufacturing, which is a burgeoning field, created by small companies, he says.
This type of manufacturing fills a huge need as some predict that half of all prescriptions will be biopharmaceuticals within the next four years, Roper says. “We’re talking about drugs for rheumatoid arthritis, cancer, diabetes, for autoimmune diseases; these are the treatments.”
South Carolina is well positioned to attract life science industries that fit within existing companies and infrastructure, without competing with Boston or North Carolina’s Research Triangle Park, Roper says.
Ultimately, the initiative could result in more high-paying jobs and the development of more business relationships and supply chains.
“We’re going to find companies that fit with South Carolina’s economy and ability to support and grow,” he says. “The field is vast.”
The privately owned kSep was formed in 2011 as a spinoff of Durham-based KBI Biopharma, which was itself acquired in 2015 by JSR Group, CMIC Holdings and Inovation Network Corporation of Japan. SSB said it would keep the company’s five employees and continue operations from the Morrisville site.
kSep has developed and markets single-use, fully automated centrifugation systems used for manufacturing biopharmaceuticals, such as vaccines, cell-based therapeutics and monoclonal antibodies.
Reinhard Vogt, member of SSB’s Board, called kSep’s centrifuges “a very innovative, single-use cell separation technology that perfectly complements our offering for downstream bioprocessing. Our clients will greatly benefit from the unique ability to collect, wash and concentrate cells quickly and reduce both the time and cost of downstream purification steps.”
Sunil Mehta, president and CEO of kSep, said the deal “will significantly speed up our internationalization and business growth. SSB will provide access to considerably more customers, especially in Asia, a market we haven’t developed yet.”
Bamboo shareholders received $150 million up front, and could be in line for another $495 million depending on milestones. Earlier this year, Pfizer had acquired 22 percent of Bamboo’s fully diluted equity for $43 million.
Bamboo has fewer than 40 employees, and nearly all have been offered positions within Pfizer, according to a Pfizer spokesman.
Bamboo is developing potential treatments for rare diseases related to neuromuscular conditions and those affecting the central nervous system. The acquisition significantly expands Pfizer’s gene therapy portfolio.
The startup is built on 30 years of work done by Jude Samulski and Xiao Xiao of UNC-Chapel Hill. According to data from the N.C. Biotechnology Center, Bamboo is one of several companies that spun out of Asklepios Biopharmaceutical (“AskBio” for short), which has received more than $700,000 in grants and loans from the biotech center to support its research and commercial development.
“The field of gene therapy research has made tremendous strides in recent years, and we are pleased to be able to further enhance our leadership position in this area through this transaction with Bamboo,” said Mikael Dolsten, president of Pfizer Worldwide Research and Development, in a statement. “We believe that gene therapy may hold the promise of bringing true disease modification for patients suffering from devastating diseases, and we hope to see this promise come to fruition – through new and existing in-house capabilities and potential partnership opportunities – in the years to come.”
Gene therapy addresses the root cause of diseases caused by genetic mutation and holds medical promise particularly for rare diseases.
The partnership, announced Thursday, will kick off with a study of the existing companies and assets within the industry statewide, lasting nine months. That study will include visits to companies and suppliers in South Carolina, according to a release. The partnership aims to grow the industry and create more biomedical jobs in South Carolina.
The public agency and private industry group will “commit financial and in-kind resources” to each other for the partnership, according to the agreement both signed. The agreement is in effect from Aug. 1, 2016 until July 30, 2017, and requires each to contribute $50,000 between Oct. 2016 and May 2017.
SCBIO will also be able to partner with regional chamber of commerce alliances, including the Upstate SC Alliance, to help build relationships between biotechnology and life science companies.
“Our relationship with Upstate SC Alliance has successfully created a seamless connection with biomed prospects from initial contact to location. And it has resulted in a Bio Task Force to build better client and customer connections,” said Craig Walker, an SCBIO executive board member and CEO of VidiStar, in the release. “We look forward to doing that statewide.”
Orthobiologics Market Opportunity and Amend Surgical Business Development
Of the more than three million musculoskeletal procedures performed annually in the US, about half involve bone grafting. The global bone graft substitute market was valued at $1.9 billion in 2010 and is forecast to reach $3.3 billion in 2017.
In December of last year Amend Surgical acquired the rights to an FDA approved, patent protected bone graft product line, NanoFUSE® Bioactive Matrix. The product will be distinct in the orthobiologics market because of its unique and powerful combination of 45S5 Bioactive Glass and demineralized allograft bone matrix. As a part of the acquisition Amend Surgical also received the rights to NanoFuse® BA which will be submitted to the FDA for approval in 2016. Company management’s extensive experience and network within the global spine, orthopedic and dental fields will facilitate rapid adoption for both of these foundation products.
Amend Surgical CEO Robby Lane said, “Our goal is to advance the science of orthobiologics with novel and disruptive bone graft substitutes. The Sid Martin Biotechnology Institute will provide Amend Surgical the foundational support necessary to continue and expand our robust commercialization and research initiatives.”
Mark S. Long, Director of Sid Martin Biotechnology Institute, stated, “Here at the Institute we specialize in helping startups that are developing and introducing new innovations and solutions. We are happy to welcome Amend Surgical. With the company’s expertise, they are on an upward trajectory to new growth and expansion.”
The Sid Martin Biotechnology Institute has facilitated the launch and acceleration of more than 60 successful companies that have garnered over $13.5 billion in venture capital and revenues. The Institute offers startups collaborative, open laboratory workspace combined with financial, technical and human resources to nuture startups’ growth and success.
Amend Surgical was admitted to the Institute’s bio-business program through the fast track admissions process. Prospective startups may submit an inquiry form through the Institute’s website www.sidmartinbio.org and management will make contact to walk them through the admissions process.
The business plan competitions will provide a total of $125,000 to five startups across Virginia in the biotechnology, health, energy, agriculture and security sectors.
Applications for businesses are now being accepted at http://www.virginiavelocitytour.org
Each stop will highlight a region’s strength ending with public pitch competitions in Roanoke, Richmond, Hampton Roads, Northern Virginia and Charlottesville. In each competition, eight entrepreneurs will pitch their business plans to local judges for $25,000 in equity-free grant prizes.
Each stop will focus on a specific industry that highlights a regional strength, including energy, STEM, biotechnology/health, cybersecurity and agriculture.
Each day the entrepreneurs will participate in public and private events, including roundtables and visits to local incubators.
“We believe that the future of entrepreneurship will be more aligned with the Chesapeake Bay than the San Francisco Bay,” Ross Baird, CEO of Village Capital, said in a statement. “Over 75 percent of venture capital goes to California, Massachusetts and New York, and the entrepreneurs who get funding are likely to be solving problems that make the lives of well-off people a little easier. When you look at the industries that really matter for our society in the long term – agriculture, energy, health and others – Virginia is leading the way.”
Village Capital, which is partnering with Virginia to plan the tour, is a Washington, D.C.-based nonprofit that trains and invests in seed-stage companies providing business solutions in agriculture, energy, education, financial inclusion and health.