Seeking to sustain its pipeline, Intarcia Therapeutics Inc. snagged start-up Phoundry Pharmaceuticals Inc. nearly out of the gate. The newco began operations in June in North Carolina's Research Triangle Park (RTP) just months after Phoundry's six founders were cut loose from Glaxosmithkline plc's (GSK) Enteroendocrine Discovery Performance Unit, where they had worked together to optimize peptide therapeutics and to investigate other approaches to treat type 2 diabetes and obesity.

While still part of GSK, the Phoundry execs – Paul Feldman, Andrew Young, Ved Srivastava, Mark Paulik, James Way and Shane Roller – became "quite familiar" with Intarcia and its peptide delivery technology, said Feldman, who served as the start-up's CEO. "We knew of them, and they knew of us."

Every player in the diabetes world now knows of Intarcia. Last month, the company reported success in FREEDOM-2, the most recent in a series of phase III studies of its implantable exenatide-filled osmotic pump, known as ITCA-650, in treating type 2 diabetes. FREEDOM-2 showed that ITCA-650 was superior in reducing HbA1c levels and producing weight loss when compared head to head with the blockbuster Januvia (sitagliptin, Merck & Co. Inc.) over a year of treatment. (See BioWorld Today, Aug. 20, 2015.)

ITCA-650 is the first injection-free GLP-1 therapy that has demonstrated the potential to deliver up to a full year of treatment from a single placement. Completion of FREEDOM-2 triggered a $100 million milestone payment from investors in a royalty deal with Intarcia earlier this year. That transaction drew so much interest that Intarcia expanded it to $300 million in June from an original $225 million. (See BioWorld Today, April 29, 2015.)

The previous year, Intarcia nabbed a $200 million financing, including $57 million from the newly formed Foresite Capital Fund II, to propel the privately held firm to a valuation of $1.75 billion. At the time, the financing vaulted Intarcia to become the highest-valued privately held biotech in the history of the industry. (See BioWorld Today, April 2, 2014.)

Intarcia has an ongoing cardiovascular outcomes study of ITCA-650 that is expected to enroll 4,000 patients and will need several years to complete before going to the FDA, according to data from Cortellis Clinical Trials Intelligence. However, the FREEDOM-2 data, combined with results from the phase III FREEDOM-1 and FREEDOM-HBL studies, are expected to be sufficient to file a new drug application, according to the company.

Intarcia, which meandered through early stage disappointments in cancer and hepatitis C virus therapies, found success when it focused on stabilizing proteins and peptides over a long period of time and developing them in a sustained delivery format. (See BioWorld Today, March 20, 2007.)

The Phoundry buy is designed to maintain that momentum.

"We liked multiple programs, and we also really liked bringing in eight world-class chemists and biologists that together bring us 120 years of peptide discovery and translational medicine insights in metabolism," said Kurt Graves, Intarcia's chairman, president and CEO. "We could not have found all this in any other company. The team will really be an engine of innovation for us, and we didn't want them to focus on anything else but the future of Intarcia in multiple chronic diseases."

DISCOVERY UNIT LOOKING TO 'UNLEASH MULTIPLE PEPTIDES'

The Phoundry team had parted amicably with GSK following the London-based pharma's restructuring, gaining an assignment to the peptide technology in return for potential product royalties.

"We were able to strike a very good deal with Glaxosmithkline in terms of getting data, equipment, reagents and consumables," Feldman said.

Once Phoundry was incorporated but before it began operating from its lab at the Hamner Institutes for Health Sciences in RTP, the company also connected with Pappas Ventures, which subsequently anchored its seed financing last month.

In the meantime, Phoundry "re-engaged" with Intarcia, Feldman said, noting that talks initially focused on a licensing agreement.

"There are great synergies between our companies," he told BioWorld Today. "We generate very highly potent, specific peptide therapeutics, but we didn't have a delivery system. They have a terrific delivery system, but they didn't have a peptide discovery group to discover their next generation of peptide therapeutics. We're going to be that engine."

Phoundry generated "an impressive library of peptides" optimized to specifications of ideal potency and selectivity to deliver once- or twice-yearly through Intarcia's matchstick-sized mini-pumps, Graves added.

"Their lead metabolic programs in diabetes and obesity are so potent that we can even combine them with our phase III GLP-1 peptide in an effort to really boost glucose lowering and try to get upward of 15 percent weight loss," he said. "Our top priority is to produce combo peptide programs in our mini-pumps that are real game-changers in diabetes and obesity."

Intarcia plans to fund the acquisition through a combination of cash and stock. Both companies declined to disclose terms, but Feldman called the deal "a great marriage," noting that it also represented a win for GSK, which stands to benefit from any commercial success.

In addition to the Phoundry acquisition, earlier this year Intarcia formed a multi-asset collaboration with Numab AG, of Wadenswil, Switzerland, to develop monospecific and multispecific antibodies for diabetes, obesity and autoimmune indications. With both transactions tucked under its belt, Intarcia expands its intellectual property rights and R&D programs targeting diabetes and obesity, including options for various combinations with ITCA-650. The company expects to move several programs, including combinations, into proof-of-concept studies in 2017 and 2018.

Phoundry will become part of Intarcia but remain in RTP, with Feldman stepping into the role of vice president and head of discovery and translational medicine. Young will become Intarcia's vice president and chief scientific officer, while Srivastava will become vice president of peptide chemistry. The unit expects to double its head count over the next 12 to 18 months.

"When you find a group of world-class drug hunters that have a proven track record, you keep them where they want to be and in the environment where they can be most effective and productive," Graves observed. "Making them move would have broken up a highly productive team that has worked together for years. We are thrilled to keep their discovery unit down there and let them unleash multiple peptides."