Sequella scouts $38M round after nabbing Pfizer antibiotic

Rockville, MD-based Sequella has snagged global rights to a mid-stage antibiotic from Pfizer ($PFE), which has been jettisoning programs that don't fit squarely into its core disciplines following a top-to-bottom restructuring of its big pipeline. And the biotech says it's on its way to rounding up a $38 million C round to fund a pivotal study for its new therapy.

The biotech picked up sutezolid--an oxazolidinone antibiotic currently in development for tuberculosis--in the deal. The antibiotic has already demonstrated that it can target Mycobacterium tuberculosis in a Phase IIa involving patients in South Africa. As is usual in these cases, Pfizer kept the deal terms under lock and key. The pharma giant has always been stingy regarding details about the programs it licenses out. But a spokesperson for the company confirmed to FierceBiotech that the antibiotic didn't fit the company's long-term development strategy regarding infectious diseases, which has been evolving.

"Pfizer's decision to out-license sutezolid to a highly capable partner is consistent with Pfizer's strategy to focus our internal resources around our core R&D pipeline," noted Pfizer's Andrew Widger. "Pfizer's focus in infectious diseases has shifted from treatment to prevention, on applying our leading expertise in vaccine technology to this important area, which we believe will enable us to have the most profound impact on patients' lives."

At Sequella, though, sutezolid fits in neatly with a Phase II program the biotech has under way for SQ109, currently in trials for drug-sensitive TB in Africa and multi-drug resistant TB in Russia. The biotech says that both drug-sensitive and multi-drug resistant TB are treated with three or more drugs to reduce the risk of drug resistance. They're banking on preclinical laboratory studies that "show SQ109 and sutezolid to each have activity as single agents, and promising additional activity when used in combination."

Two years ago Sequella reported that it had inked a $50 million licensing deal with the Maxwell Biotech Venture Fund on SQ109 covering the Russian market

"These two drugs, SQ109 and sutezolid, could potentially anchor a totally new drug combination regimen to treat all forms of active TB disease," said Carol Nacy, CEO of Sequella. "We will pursue development of sutezolid under its own NDA, and also plan for combination studies in subsequent clinical trials."

"Healthios Capital Markets (banker, Ellen Baron) is orchestrating the financing," Nacy told FierceBiotech in an email. "The target amount is $38 million, 66% of which will fund a global pivotal Phase 2b trial for both drugs in TB."

Antibiotics are a key focus at a number of biotechs, including Tetraphase and Rib-X. After a long drought of clinical activity following Big Pharma's exit from the field, Congress has come up with some new incentives that has helped bolster the smaller companies that stayed loyal to the field. But it's still a tough market to crack, according to some of the leading players.

- here's the press release

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