Company to Watch – Venatorx Pharmaceuticals
by Marie Daghlian
In 2010, Drs. Christopher Burns, Daniel Pevear, and Luigi Xerri set out to build a new company focused on anti-infectives, and named it Venatorx, which loosely translated means “Drug Hunter.” Their ambition was to invent novel classes of antibiotics with novel mechanisms of action. And this is what they did.
They didn’t have anything tangible—no money, assets, or facilities—just ideas that they threw out to each other when they met at Panera Bread.
The three men knew each other from having worked together on antibacterials at Protez Pharmaceuticals, a small startup in Malvern, Pennsylvania that was acquired by Novartis in 2008 for $100 million upfront and $300 million in potential milestone payments.
Perhaps it was a crazy idea at a time when many drugmakers were abandoning the space as unprofitable, including Novartis, which shut down development of the Protez program two years later. But Chris Burns, president and CEO of Venatorx Pharmaceuticals, says there were several positive reasons the three founders focused on the area: they knew the space well, they had some innovative ideas, and they knew the U.S. government was setting aside a fair amount of money to support development of antibiotics and antifungals.
“Another plus—it turns out that in antibiotics, what works in the petri dish tends to work in the human being,” Burns says. “So, if you can kill it in the dish, you can kill it in the tissue if you can get it there safely. That takes a lot of risk out of the clinical development.”
Of course, they knew there was a huge downside in pharma exiting the space and the technical difficulties of creating something new that bacteria haven’t figured out how to get around. Then there are the challenges in the early part of a commercial launch in getting physicians, hospitals, and payers to use your drug when they prefer to go with the cheaper and better-known antibiotics.
Still, they thought if they could get government to fund their work, they could make a go of it without spending a lot of investor money. And that is what they did. A million-dollar grant from the National Institutes of Health enabled Venatorx to establish a small lab. Some of their ideas worked and they used that to get more NIH money. They got more grants, the grants became contracts, and they supported their drug development. Now 11 years later, the company has more than 80 employees, two facilities, and three in-house development programs in the clinic. That’s pretty good for a company that has not been on the global media radar.
Venatorx’s lead therapeutic, in late-stage studies, is an intravenous drug that targets highly resistant bacteria called ‘superbugs.’ The company expects to report topline data this year and to file a New Drug Application with the FDA in 2022, with filings in Europe and China shortly afterward. A second antibiotic is an oral agent in early-stage clinical studies, that the company anticipates will enter mid-stage trials in early 2022.
It helps that the company’s antibiotics are subject to the GAIN Act and QIDP (Qualified Infectious Disease Product), which puts them on an accelerated review pathway. But Burns would like to see more government support in this much needed area to enable successful commercialization of these products.
“There are a number of government programs that are still in debate,” Burns says, “which could be very attractive to the holders of a commercial asset, where the government subsidizes you in the early years of commercialization. Having the asset and building around those incentives would be attractive.”
But it hasn’t happened yet. Two bills in Congress, the D.I.S.A.R.M. Act that was introduced in 2019, and the P.A.S.T.E.U.R. Act, which is the newer bill, could support market entrance of a new arsenal of germ fighters. Burns describes P.A.S.T.E.U.R. as a sort of subscription: “Basically the government says if you promise to produce and put into the sales channel these innovative new agents, we will help you. So, they are effectively buying a subscription to an insurance policy—not stockpiling, but incentivizing you to do the work and they’ll make sure you survive those early years while you are getting it installed with hospital and payer systems. And at some point, you fly on your own.”
Burns says if the bill passes, we could solve antimicrobial resistance, but getting it passed won’t be easy, and his company, and industry organizations are pushing for its passage.
But with or without such legislation, Burns is hopeful about the future of Venatorx. He says their lead therapeutic goes after the really hard to fight bacteria, which are slowly but surely spreading throughout the world. Venatorx’s experimental drug has “the best coverage of anything that’s in development or has recently been approved,” Burns says.
Burns thinks it could be a commercial success, perhaps a billion-dollar drug, because having broad coverage is key. When a very sick patient comes into the hospital, the doctor often doesn’t know right away what bacteria the patient has. Lab tests take days and doctors usually prescribe something with broad coverage until they can narrow down the cause of infection.
Venatorx has also expanded its pipeline, adding an anti-viral agent targeting hepatitis B, a chronic disease in many parts of the world with no cure. The company went about it in the same way: they came out with some ideas, wrote some grants, and got the funding to develop what Burns says is a highly potent molecule that the company is advancing into Phase 1 this year.
The company’s prospects are bright. While government grants and contracts have supported much of Venatorx Pharmaceuticals’ research and drug development activities to-date, the time has come to look to other sources of capital. A $42 million series B round in 2017 from Versant Ventures, Abingworth, and Foresite Capital was the last time Venatorx raised money from investors. Now it’s time for the company to access new sources of capital as it prepares for regulatory filings, commercialization and other key milestones in the future.
This is part of the Big4Bio Company to Watch program for May 2021: Venatorx Pharmaceuticals.
For more information on the series, click here.