Urovant Sciences Ltd., an Irvine-based clinical-stage biopharma company focused on developing and commercializing drugs for urologic conditions, has inked a deal for a second product candidate.
The 2-year-old company, whose executive ranks consist of a number of former local officials with Avanir Pharmaceuticals Inc. and Allergan PLC, last week disclosed that it reached a deal with New York-based biotechnology company Ion Channel Innovations LLC to license its hMaxi-K gene therapy product, for potential uses in the treatment of overactive bladder, a medical condition which is characterized by a sudden urge to urinate that’s difficult to control.
The deal’s a potential $95 million financial commitment, if not more, according to Urovant.
In addition to an upfront payment of $250,000 to Ion, the company will pay up to $35 million upon the achievement of certain development and regulatory milestone events, and up to $60 million more “upon the achievement of certain sales milestone events,” Urovant said in regulatory filings last week.
It’s aiming to initiate a proof-of-concept second-phase clinical trial for hMaxi-K next year.
The hMaxi-K therapy has already been evaluated in two phase 1 studies, which “showed dose-dependent improvements in urinary urgency and frequency,” according to regulatory filings.
There are no currently available FDA-approved gene therapy treatments for overactive bladder, also known as OAB, according to the company.
Last year, it struck a deal for a late-stage OAB drug candidate licensed from Kenilworth, N.J.-based pharmaceutical giant Merck & Co. Inc. (NYSE: MRK).
Urovant agreed to pay Merck up to $44 million upon the achievement of certain regulatory milestone events, and as much as another $80 million upon the achievement of certain sales milestone events.
The oral, once-daily drug candidate is in a third-phase trial.
Financial terms of the licensing deal with Ion were disclosed last week as part of an updated Securities and Exchange filing, pertaining to Urovant’s planned initial public offering, plans for which were initially filed in July.
$150M Offering
The company is aiming to raise upwards of $150 million in the IPO, with proceeds used to fund clinical trials for its licensed products, working capital and general corporate purposes.
The cash is needed.
The company’s already posted a $95.5 million accumulated deficit since its early 2016 founding, and said it expects “to continue to incur substantial and increasing losses through the commercialization of our product candidates.”
Its auditors, Ernst & Young LP, have issued a going concern warning about the company, “expressing substantial doubt that we can continue as an ongoing business due to insufficient capital,” SEC filings note.
If the IPO falls through, “we will need to create alternate financing or operational plans to continue as a going concern,” the company said.
The IPO is being underwritten by J.P Morgan, Jefferies, and Cowan.
The company plans to list its shares on Nasdaq under the UROV ticker symbol.
The financial risk of investing in Urovant is worth it, factoring in the large and growing market for its prospective OAB drug products, the company noted in its SEC filings.
The company estimates there are more than 30 million Americans over the age of 40 with symptoms of overactive bladder.
Nineteen million prescriptions for oral medications were written last year for approximately 3.3 million U.S. patients, according to SEC filings.
FDA-approved drug products used in the OAB market that are likely to compete with Urovant include Myrbetriq, which is marketed by Tokyo-based-based Astellas Pharma Inc., and Allergan’s Botox.
URP HQ
Urovant is based out of a small office in University Research Park and employs about two dozen people, according to SEC filings.
The company’s led by Chief Executive Keith Katkin, who joined a year ago.
He previously served as president and chief executive of Aliso Viejo-based Avanir Pharmaceuticals Inc., and led the nervous system disorder-focused drug development company through its $3.5 billion sale to Japan’s Otsuka Pharmaceutical Co. in 2015.
Other execs include Chief Medical Officer Cornelia Haag-Molkenteller, who was vice president in clinical development and therapeutic-area head for urology, women’s health and internal medicine at New Jersey-based Allergan, which has a large operation in Irvine.
Another notable name involved in the company: biotech entrepreneur Vivek Ramaswamy.
Urovant is one of the 12 “vants” falling under the umbrella of his Basel, Switzerland-based Roivant Sciences, which aims to take advantage of abandoned or deprioritized drugs that aren’t a priority in the pipelines of large pharma companies.
The former hedge fund manager first made waves by taking Axovant Sciences Ltd., a drugmaker aimed to treat Alzheimer’s disease, public in 2015.
At one time, Axovant was valued at more than $3 billion, but its shares crashed last year after its drugs—licensed from GlaxoSmithKline PLC—failed to work; it’s now valued at about $250 million.
“We are pleased to add the gene therapy hMaxi-K to our clinical development portfolio,” Katkin said in a statement following its latest licensing deal.
“We are eager to study the potential of hMaxi-K as an alternative therapy for OAB patients who are not getting adequate relief from other therapies,” he said.
“Urovant also has access to gene therapy expertise through the Roivant family of companies,” he noted.
