Fledgling biotech Vtesse in $200M buyout from struggling Sucampo

The deal gives Sucampo access to the biotech's rare disease candidate.

Despite only coming into life two years ago, Pfizer and NEA-backed upstart Vtesse has already seen its rare disease candidate VTS-270, for Niemann-Pick disease type C1, nab the coveted FDA breakthrough tag, and has now been bought out by Maryland-based biotech Sucampo.

The deal sees the biopharma pay $200 million upfront in cash and stock, with the pair also seeking to set up a new foundation, after the deal is signed, “to support research related to NPC disease.” Both will pay into this new organization.

Sucampo and Vtesse’s scientists will combine to work on VTS-270, which is in mid-to-late-stage trials and works as a mixture of 2-hydroxypropyl-ß-cyclodextrins.

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It’s given to patients via an intrathecal infusion, with early data showing it “may slow or stop certain indicators of NPC-1,” an ultra-orphan, progressive and fatal disease caused by a defect in lipid transport within the cell, according to Vtesse. Results from the pivotal phase 2b/3 trial are expected in by the middle of next year.

NPC is a genetic disease caused by a defect in cell lipid transportation that leads to excessive accumulation in the brain, liver and spleen. VTS-270 specifically targets cholesterol storage to bypass the NPC1/NPC2 pathway to enable normal cholesterol transportation in the lysosomes of cells. There are around 3,000 cases globally each year, with no approved treatments.

The drug is expected to work to restore the normal cholesterol metabolism and regulation at the cellular level.

Ben Machielse, president, founder and CEO of Vtesse, said: “The Vtesse team remains fully committed to the NPC community and will provide continuity to the patients, families, and clinical sites in cooperation with Sucampo. We recognize that Sucampo shares our commitment to the patients and caregivers of NPC and provides us with the best opportunity to bring this important treatment to NPC-1 patients in the U.S. and around the globe. 

“Together, we will accelerate the global development and commercialization of VTS-270, relying on the complementary capabilities at Sucampo.  Our commitment to the patients, families and physicians remains steadfast.”

Vtesse was launched out of the Cambridge, MA-based incubator Cydan in early 2015. And the same team that backed Cydan: NEA, Pfizer Lundbeckfond Ventures, Bay City Capital and Alexandria Venture Investments, also signed up for a Series A financing round that hit $42 million last year.

It had a better 2016 than Sucampo, which in the summer killed off development of its lead experimental drug cobiprostone after another midstage trial showed it produced no clinical benefit, this time in oral mucositis.

This came after it undertook a futility analysis of a phase 2a study of an oral spray version of cobiprostone. The drug was seeking to prevent oral mucositis (which causes mouth ulcers) in patients receiving radio-chemotherapy for head and neck cancer.

It had bet big on this trial working after announcing a year ago that the same candidate had fluffed its first phase 2a test after it failed to meaningfully improve heartburn symptoms for proton pump inhibitor-resistant nonerosive reflux disease, or symptomatic gastroesophageal reflux disease.

This was a major hit to the company, given that it was its lead drug, and analyst Jason Gerberry at Leerink said back in April that the cobiprostone study was probably its most important pipeline catalyst for 2016.

Sucampo, which has a market cap of around $500 million and trading at $11 a share, has been developing a market for its constipation drug Amitiza (lubiprostone), where sales are expected to peak at $500 million by the decade’s end. 

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