With $825M SPAC merger, ProKidney sets stage for phase 3 trial of kidney disease cell therapy

Chamath Palihapitiya’s special purpose acquisition company is throwing its weight behind ProKidney. The merger will give ProKidney $825 million to fund phase 3 development of a cell therapy designed to slow, stabilize and reverse decline in kidney function.

ProKidney, which was founded by Royalty Pharma CEO Pablo Legorreta, first made waves in 2019, when it disclosed the $62 million acquisition of inRegen and raising of $75 million to fund the deal and another takeover. Since then, the biotech has worked to advance the ReACT cell therapy it acquired from inRegen as a treatment for chronic kidney disease, culminating in the start of a phase 3 clinical trial this month.

With the study due to enroll up to 1,500 patients and deliver data in 2025, ProKidney will need a sizable sum of money to get the autologous cell therapy to market. That is where Social Capital Suvretta Holdings Corp. III, a SPAC set up by billionaire investor Palihapitiya and Suvretta Capital, comes in.

The SPAC has $250 million in cash. Through the merger, ProKidney will gain that cash and the proceeds of a private investment that is expected to generate $575 million, bringing the total haul up to $825 million. Social Capital’s Palihapitiya is leading the investment with a $125 million commitment. Existing ProKidney investors are putting in $50 million, and Suvretta Capital’s Averill strategy is adding $30 million.

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Together, the investors will support phase 3 development of ReACT and preparations for its commercial launch. ProKidney creates each autologous ReACT therapy by identifying progenitor cells in a patient’s own biopsy. The team formulates the progenitor cells for injection into the kidney, where, if ProKidney is right, they will integrate into the damaged tissue and restore the function of the organ.

Last year, ProKidney presented data on 51 Type 2 diabetic chronic kidney disease patients who received image-guided injections of autologous renal progenitors across two midphase clinical trials. The studies supported the safety and feasibility of the approach.

ProKidney presented preliminary efficacy data in a presentation on the SPAC merger. Kidney function, as measured by eGFR, improved in the 18 months after treatment with ReACT while declining in the control cohort. The phase 3 clinical trial will use a composite endpoint of time to the earliest of a 40% fall in eGFR, chronic dialysis, a 30% increase in urine albumin-creatinine ratio, or renal or cardiovascular death.  

If the drug works as ProKidney expects, a far from certain prospect given the novelty of the approach, it could rack up big sales. ProKidney puts the population of eligible patients at 4.4 million. If ProKidney can penetrate 1% of the addressable market and sell ReACT for $360,000 a patient, the product could bring in $16 billion.