Versanis Bio snags $70M for a ditched Novartis muscle drug, with a little help from its old CEO Jimenez

Joe Jimenez was in the top spot at Novartis when the Big Pharma tried burying the news that its "breakthrough" muscle drug failed a late-stage trial in 2016. He's giving the drug a second chance, and so are other investors, to the tune of $70 million.

Bimagrumab is getting a new life through Versanis, which emerged Tuesday with the series A funds. The Oakland, California, upstart will use the financing to begin an advanced phase 2 trial of the drug for the treatment of obesity. 

The monoclonal antibody blocks the binding of ligands that include myostatin and activin A. Novartis studied the drug in more than a dozen clinical trials enrolling upwards of 1,500 people, Versanis said. The biotech said a recent 48-week treatment regimen with the drug led to a 20.5% loss of total body fat mass in obese patients with diabetes.

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Novartis previously culled the drug after it didn't pass muster in a phase 2b/3 study for sporadic inclusion body myositis, a rare, muscle-wasting disease. MorphoSys execs originally put the potential drug's peak sales at $4 billion in spring 2014, with the FDA handing it a breakthrough therapy designation and then it failed in April 2016. 

Now, it has a new lease on life in the hands of Versanis, which has in-licensed bimagrumab, an activin receptor type II antagonist for a new disease target. Jimenez's venture firm Aditum Bio seeded Versanis earlier this year and he snagged a seat on the biotech's board to see if the drug could get a green light for obesity. 

Versanis' board is also stacked with Mark Fishman, former president of Novartis Institutes for Biomedical Research.

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“As people age, loss of muscle mass makes it even harder to lose weight. All existing obesity treatments risk further loss of muscle, together with fat. Bimagrumab is a unique therapy that builds muscle while markedly reducing fat, providing a potential breakthrough in the obesity epidemic," Fishman said in a statement. 

Atlas Venture and Medicxi co-led the series A with participation from Aditum Bio.