- A little-known biotech company developing an antiviral pill for COVID-19 is going public through a merger with a blank-check company launched by the venture firm Foresite Capital, a deal that will hand the California-based developer $276 million to advance its drug candidate into clinical testing.
- About a quarter of those funds will come via a separate investment by Foresite, Gilead and a long slate of other venture investors into the biotech, called Pardes Biosciences. The remaining $200 million or so is held by FS Development Corp. II, the special purpose acquisition company with which Pardes will merge.
- Pardes is led by Uri Lopatin, a biotech entrepreneur and infectious disease physician who previously co-founded Assembly Pharmaceuticals. The biotech has personal ties to both Foresite and Gilead, with the venture investor's CEO sitting on Pardes' board of directors and a longtime Gilead executive as its chief development officer.
Earlier this month, the Biden administration announced plans to invest $3 billion into research, testing and manufacturing of antiviral treatments for COVID-19. Oral medicines like the one Pardes seeks to develop will likely be a key focus of the government's efforts, as such a drug could be a convenient complement to the more logistically challenging infused medicines like Gilead's Veklury and Regeneron's antibody cocktail.
Even as the majority of the U.S. population has been vaccinated, effective antivirals are still badly needed for groups in whom vaccines aren't as effective, or for those who won't get the shot. Globally, many countries aren't likely to receive adequate supplies of vaccines until later this year or next. Virus variants also threaten to erode the potency of some available treatments and shots.
"The emergence of novel variants of increasing pathogenicity, such as the Delta variant, reinforces the need for new therapies that can be easily and rapidly deployed globally," said Foresite's Jim Tananbaum in a statement announcing the deal on Tuesday.
Pardes' antiviral candidate, which has not yet been tested in humans, is a type of drug known as a protease inhibitor, aimed at the coronavirus protein responsible for cutting free the rest of the viral proteins to do their jobs. Many protease inhibitors are approved to treat HIV and hepatitis C, and drugmakers like Pfizer are trying to do the same with COVID-19.
Pardes will start well behind Pfizer, which is already in testing with intravenous and oral formulations of its protease inhibitor. The smaller biotech company hopes to begin clinical trials later this year studying its drug as a prophylactic and as a treatment.
Merck & Co., as well as Atea Pharmaceuticals and partner Roche, also have different types of oral COVID-19 drugs in advanced testing.
Gilead's backing is notable, as the large biotech is the maker of Veklury, the only approved antiviral drug for COVID-19. Veklury is currently given as an intravenous infusion over several days, however, and data from randomized, placebo-controlled clinical trials did not show a definitive survival benefit to treatment.
Pardes has connections to Gilead as its chief development officer is Brian Kearney, who worked at the larger drugmaker for more than twenty years in development of its HIV, hepatitis B and hepatitis C drugs.
In addition to Gilead and Foresite, RA Capital Management, Frazier Life Sciences, EcoR1 Capital and three other investment firms are backing Pardes, which will trade under the ticker PRDS. The deal is expected to close in October.
The agreement is the latest example of a drugmaker merging with a special purpose acquisition company, or SPAC, this year. Tango Therapeutics, a cancer biotech, agreed in April to a $353 million deal that will have it go public later this year, for example.
In the broader life sciences space, Ginkgo Bioworks is merging with a SPAC in a deal that will hand it roughly $2.5 billion in proceeds.
Correction: A previous version of the story misidentified a treatment being developed by Novartis and Molecular Partners as an example of an oral drug for COVID-19. The reference was removed.