Vedanta raises $68M, reveals setback to Bristol Myers alliance

Vedanta Biosciences has raised $68 million to take a microbiome candidate into phase 3. The biotech also used the series D update to reveal the failure of its Bristol Myers Squibb checkpoint inhibitor alliance to generate data to support further development.  

Massachusetts-based Vedanta is developing oral drugs that are designed to deliver defined bacterial consortia to treat diseases linked to the microbiome. With interest in the concept riding high again after Seres Therapeutics’ phase 3 data in Clostridioides difficile infection (CDI), Vedanta has put together a syndicate of investors to support plans for further development of its pipeline.

The $68 million includes a previously disclosed $25 million investment from Pfizer. Magnetar Capital led the series D with the support of new and existing investors including Verition Fund Management, Fosun Health Capital and PureTech Health, which co-founded Vedanta and owned almost half the biotech as of the end of 2020.

Vedanta will use the money to fund a phase 3 trial of lead candidate VE303 in CDI. The therapy is made up of eight types of clonal human commensal bacteria strains that Vedanta selected based on their potential to provide colonization resistance to C. difficile.

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A phase 2 VE303 trial in patients at high risk of recurrent CDI is nearing a readout. Vedanta expects to deliver top-line data from the trial, which is designed to inform selection of the phase 3 dose, in the third quarter. The phase 3 trial is set to start in mid-2022.

With BARDA partly supporting VE303 development through a grant worth up to $76.9 million, the series D round is large enough to support work on a second program. Vedanta plans to use the cash to start a phase 2 clinical trial of VE202 in patients with mild-to-moderate ulcerative colitis in the second half of 2021.

VE202 consists of 16 clonal human commensal bacterial strains. Vedanta picked the strains based on their ability to induce regulatory T cells in the gut mucosa, decolonize pro-inflammatory organisms and strengthen the epithelial barrier. In June, Vedanta released phase 1 data in healthy volunteers that linked VE202 to durable and dose-dependent colonization.

While VE303 and VE202 are Vedanta’s most-advanced candidates, the biotech put itself on the map through a collaboration with Bristol Myers that is focused on VE800. Building on evidence that the microbiome influences the response to checkpoint inhibitors, Bristol Myers and Vedanta teamed up to test Opdivo in combination with 11 clonal human commensal bacterial strains.

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In disclosing its series D round, Vedanta revealed the observed response rates in its 54-subject phase 1 trial “did not meet the prespecified criteria to expand into the next stage of the study.” Vedanta is analyzing samples from responders to try to identify subtypes of patients who may be more likely to benefit from microbiome modulation and will continue to look for oncology opportunities. News of the setback comes months after Seres stopped its own Opdivo combination trial.