Niall O’Donnell fancies himself an archaeologist of the pharmaceutical persuasion. His firm, RiverVest Ventures, is scoping out the failed and forgotten drugs of big pharma, building companies to repurpose these benched meds for new indications.
The aim is to find drugs that have passed for safety in clinical trials, but may have shown limited efficacy in the initial disease they aimed to treat.
“It’s almost like an engineering problem,” O’Donnell said. “You know this widget will work; you just need to find the right place to apply it.”
This unconventional strategy is in line with the recommendations of National Institutes of Health head Francis Collins, who tasked drug companies to “open their freezers” and seek out drugs that have passed safety trials but may have failed in successfully treating the initial disease targets.
Though it may be tedious to excavate useful information from dusty reports, RiverVest has found success in this path already. The firm is fresh off an exit after its portfolio company, the San Diego-based Lumena Pharmaceuticals, was bought out by Irish drugmaker Shire for $260 million last month.
Lumena was founded in 2011 but held trappings of a later-stage company. Having licensed a shelved drug from Pfizer, Lumena already had in hand the safety and efficacy results from 1,400 patients in mid-stage clinical trials. The drug was initially developed for cardiovascular disease, but O’Donnell and his associates found by delving into patient data that liver function was impacted by the drug. They shifted the focus to a handful of liver disorders, including a form of cirrhosis, and within three years raised $78 million in venture capital from a number of firms.
While O’Donnell said that RiverVest aims to exit within five years, by taking this path, it only took three. The firm will continue to use this approach.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
O’Donnell only spoke in broad strokes about RiverVest’s latest moves, but said the firm has been approached by a big pharma company that sent three drugs its way – two phase 2 assets and one phase 1 asset. All have passed safety studies, but due to internal politicking and pivots away from the original designated disease target, they have chosen to abandon further research of these cryptic drugs.
“The issue is, they can’t play in that therapy space anymore, so they’re actively out-licensing,” O’Donnell said. “And we’re seeing this happen with more and more pharma companies.”
Indeeed, RiverVest is by no means unique in this approach – this trend seemed to start in 2012, as the industry started to shift toward more unorthodox models of drug development.
Take for instance Atara Biotherapeutics, a Los Angeles-area biotech launched in 2012 by Amgen and venture firm Kleiner Perkins Caufield & Byers. The company initially out-licensed six Amgen compounds in the fields of kidney disease and cancer. The 2-year-old firm is relatively well-capitalized, having closed out a $52 million Series B round earlier this year, though has yet to exit.
“The joys of what’s happening right now as the pharmaceutical industry consolidates is that they’ve effectively axed a lot of really interesting R&D programs,” O’Donnell said. “Sometimes pharmaceutical companies don’t even know what’s on their shelves, so you have to do a bit of an archaeological dig – and it can be successful if you can wring new assets out.”
