Visterra adds $24M to series C to take flu drug to phase 2b

Money
Visterra plans to start a phase 2b trial of flu drug VIS410 early next year.

Visterra has extended its series C round to fund the advance of its lead candidate into phase 2b. The extension puts Visterra back on the multifront path through the clinic it plotted out before its aborted IPO attempt.

Cambridge, MA-based Visterra went to Wall Street during a dip in biotech IPOs and found investors unreceptive to its pitch. But, as CEO Brian Pereira, M.D., said shortly after that setback, Visterra has a strong syndicate of private investors. Many of these backers, aided by the support of a clutch of new investors, have stepped up to fund Visterra to the next stage in its evolution.  

The Bill & Melinda Gates Foundation, Merck’s VC wing, Polaris Partners and Flagship Pioneering are among the big-name Visterra backers to return for the series C extension. New investors Serum Institute of India, CTI Life Sciences and Allegheny Financial also put up cash.

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Raising the $23.6 million extension brings the series C total up to $46.7 million, although, as the IPO filing made clear, Visterra had worked its way through a chunk of the original 2016 round by this time last year. The dwindling of Visterra’s bank balance to less than $15 million and growth of its R&D budget needs prompted the attempted $50 million IPO. 

Visterra has returned from private investors with notably less than that, although the series C will be enough to move key assets past milestones. Most importantly, Visterra now has the money to wrap up a phase 2a of influenza A treatment VIS410 in ambulatory patients and start a phase 2b of the same monoclonal antibody in hospitalized patients.

Both events are due to happen early next year. Visterra had hoped to get VIS410 into the phase 2b in the first half of this year, but the IPO misstep thwarted that plan. That pre-IPO target was itself later than Visterra once hoped. VIS410’s smooth passage through the clinic was blocked in March 2016 when the FDA hit Visterra’s phase 2a with a partial clinical hold that lasted six months. The FDA lifted that hold after a phase 1 trial dispelled its concerns about gastrointestinal safety.  

With the regulatory barrier removed and money in the bank, Visterra now has everything in place to move forward and generate data to support another run at Wall Street or the deal it mooted as one option for VIS410 after the aborted IPO.

Visterra earmarked $7 million to $9 million for the BARDA-supported phase 2b at the time of the attempted IPO, meaning a slice of the series C extension is free for other programs. Chief among these programs is VIS649, an IgA nephropathy product candidate Visterra is moving toward the clinic.