Intarcia acquires peptide therapeutics company Phoundry Pharmaceuticals – October 8, 2015

We’re back with more on Intarcia’s acquisition of Phoundry Pharmaceuticals. Intarcia announced the acquisition late last month, making this its second deal of the year (the first being a deal with Numab to develop new antibody-based therapies for diabetes, obesity, and autoimmune diseases). Phoundry was founded in February 2015 after splitting with GSK during a reorganization in December 2014. It was founded as a peptide therapeutic company with a mysterious portfolio of preclinical peptides optimized to enhance their potency. With the acquisition, Intarcia will commence two R&D programs with the Phoundry team and one with Numab targeting type 2 diabetes and/or obesity in the next two to three years. Those three programs will aim to develop combinations of Intarcia’s ITCA 650 (osmotic exenatide mini-pump) and Phoundry’s peptides and Numab’s antibody fragment asset, though Intarcia CEO Mr. Kurt Graves was vague about the specifics of either discovery program’s specific targets.

We spoke with Phoundry’s former CEO Dr. Paul Feldman (now Intarcia’s Head of Discovery and Translational Medicine) and former Chief Scientific Officer Dr. Andrew Young (now Intarcia’s Chief Scientific Officer, formerly of Amylin) yesterday and garnered more details about this acquisition and Intarcia’s plans for Phoundry’s peptides moving forward. Dr. Feldman and Dr. Young explained that Phoundry has been able to produce especially potent peptides that should work well within Intarcia’s implantable device. Of the two combinations currently under development, both are in the discovery stage and one is expected to begin preclinical development in 2016, so these are all very early stage. Intarcia hopes to commence clinical trials in 2017. Down the line, Intarcia’s characteristically ambitious goal is to make the next big thing in diabetes: a “follow-up” to GLP-1 agonists that can reproduce the metabolic benefits of bariatric surgery in a medication. That said, the company isn’t ruling out the possibility of expanding to other disease areas, including outside of metabolic diseases. See below for more details from our conversation and join us in looking forward to what the newly-expanded Intarcia will achieve!

• Here’s what we know about Phoundry’s peptides. While Dr. Feldman and Dr. Young could not share what drug class the peptides will belong to (disappointing!), Dr. Feldman noted that they are interested in gut peptides and draw inspiration from the metabolic benefits of bariatric surgery mediated through changes in those peptides. In addition, Dr. Young pointed out that Intarcia’s implanted delivery device is fairly small and, for a peptide to work within that device, it needs to be very potent. Few existing drugs fit the bill, but Phoundry has been able to render peptides especially potent so that they can fit into Intarcia’s device. We’ll be curious to learn exactly how Phoundry achieved this, whether it was through the discovery of new, more potent peptides or through modifications to existing ones. We would bet on the latter but we don’t know.
• Phoundry was particularly attracted to Intarcia’s delivery device and its potential to improve patient adherence. Dr. Feldman also stated that Phoundry wanted to deliver its peptides in a very specific manner, with a slow ramp up to a steady state concentration that can be maintained over a long period of time. Intarcia’s delivery device offers that profile for Phoundry’s peptides, making the acquisition a natural fit from Phoundry’s perspective.
• The two combinations of Phoundry peptides and ITCA 650 will be developed simultaneously, with staggered timelines. Two of the combinations are in the discovery stage, with one at a fairly advanced stage and one about a quarter of the way through the discovery process. The company anticipates beginning discovery work on a third target (therapeutic area yet to be determined) in 2016 and to initiate clinical trials for the most advanced candidate in 2017. Intarcia recently released positive topline results from its phase 3 FREEDOM-2 trial for standalone ITCA 650 and expects to submit it for regulatory approval in the first half of 2016. These new preclinical combination products will be developed as a “next-generation” ITCA 650, which should reach the market before ITCA 650’s patent expires in the early 2030s.
• Intarcia has big plans down the line for Phoundry’s peptide expertise. While ITCA 650 is essentially an improvement in delivery mechanism for an existing drug, with this Phoundry acquisition, Intarcia hopes to develop new “follow-ups to GLP-1 agonists.” The goal is to create a drug that delivers superior glycemic control and greater than 10% weight loss – an incredibly ambitious goal with an eye toward mimicking the effects of bariatric surgery. While Dr. Young stopped short of speculating whether or not these new drugs will have cardioprotective effects, he did note that bariatric surgery does have a cardiovascular benefit.
• Looking to the future, Intarcia isn’t ruling out the possibility of expanding beyond the metabolic disease field. Dr. Young pointed out that Intarcia’s delivery device can be applied to any chronic disease as long as the drug carried within it is potent enough. Cardiovascular, renal, and gastrointestinal diseases were all mentioned as areas for potential expansion in the future.
• Dr. Feldman and Dr. Young highlighted the pivotal role GSK played in providing the starting point for the nascent company. Dr. Feldman, Dr. Young, and Phoundry’s other founders were all former employees in GSK’s Enteroendocrine Discovery Performance Unit and GSK’s reorganization in December 2014 resulted in the group splitting off to form their own company, established in February. The other founders are Dr. Ved Srivastava (Vice President of Peptide Chemistry), Dr. Mark Paulik (Senior Director, Biology), Mr. James Way (Senior Director, Molecular Pharmacology), and Mr. Shane Roller (Senior Director, Drug Metabolism and Pharmacokinetics). In a deal with GSK, the group was able to acquire preclinical data, equipment, reagents, and consumables so that it was able to get up and running 18 months ahead of the usual schedule for establishing a pharmaceutical company, according to Dr. Young. We’re a bit surprised GSK agreed to this arrangement and wonder about the implications for GSK.  
• A partnership between Phoundry and Intarcia appeared to be in the cards very early on. Intarcia first became aware of the work that would eventually become Phoundry while the founders were still with GSK and had met with them at that point. After Phoundry became an independent company, Intarcia and Phoundry engaged in partnership discussions in early 2015. Originally, the two companies were in negotiations over a licensing agreement to use Phoundry’s peptides within Intarcia’s implantable delivery device. Around July, the companies decided that their products and goals aligned and that an acquisition would be the way to move forward. Although no information on deal terms were disclosed, we are impressed that Intarcia was would have such early knowledge about Phoundry, and that it was aggressive enough to buy rather than partner.  We look forward to watching the expanded leadership at Intarcia.

Close Concerns Questions

• Given Phoundry’s enteroendocrine background and goal of mimicking bariatric surgery, will the peptides mainly target the gut?
• If novel drug classes are being investigated, is there a possibility of them also being offered through alternative delivery mechanisms (such as an injectable or an oral) in addition to Intarcia’s implantable device?
• How might patient, provider, and payer reception of ITCA 650 affect the development of these next-generation products?
• Is there potential for an implantable GLP-1 agonist/basal insulin combination from Intarcia and Phoundry’s combined efforts?
• Will Intarcia pursue other partnerships to deliver non-peptide agents (such as an SGLT-2 inhibitor) through its device?
• Will Intarcia and Phoundry pursue any programs in type 1 diabetes?

-- by Helen Gao, Emily Regier, and Kelly Close