Innovate Goes Public, Raises $21M More
Raleigh-based Innovate Biopharmaceuticals, a clinical stage biotechnology company focused on developing novel autoimmune and inflammation therapeutics, has completed its reverse merger with California-based Monster Digital and is now a publicly traded company.
Innovate also closed on a concurrent financing of $21 million from an undisclosed group of current and new investors.
“It’s an exciting transition for Innovate as we strive to become a leader in autoimmune and inflammatory drug development for diseases with unmet medical needs,” Jay Madan, founder and president of Innovate, said in a news release. “With the continued support from our existing investors, and now with access to the capital markets, our main focus will be rapidly progressing our clinical assets.”
Innovate has a late-stage clinical pipeline of drugs addressing unmet needs in diseases such as celiac disease, inflammatory bowel disease and nonalcoholic steatohepatitis.
Innovate’s CEO, Christopher Prior, Ph.D., said the company will use the proceeds from the concurrent financing to advance its celiac disease drug candidate, larazotide acetate (INN-202), into Phase 3 clinical trials. The trials are expected to begin in the second quarter of 2018.
“In addition, we believe that as a public entity we will be able to engage a wider range of investors, which will allow us to advance our mild-to-moderate ulcerative colitis combination therapy into Phase 2 trials and to expand our pipeline,” Prior said.
Innovate shares will begin trading on the NASDAQ Capital Market stock exchange under the new ticker symbol INNT.
Profile of celiac drug candidate
Innovate is developing larazotide acetate for the potential treatment of celiac disease, a type of inflammatory bowel disease that affects 3 million people in the United States and about 15 million worldwide.
Larazotide, an oral peptide formulated into a capsule, decreases intestinal permeability – also known as “leaky gut” – and regulates tight junctions by reducing antigen trafficking across epithelial cells in the intestines.
Leaky gut has been widely recognized in the scientific literature as a gateway to multiple autoimmune diseases, including celiac disease, irritable bowel syndrome, inflammatory bowel diseases such as Crohn’s and ulcerative colitis, type 1 diabetes mellitus, nonalcoholic steatohepatitis, chronic kidney disease and several others.
Larazotide has successfully met its primary endpoint in a Phase 2b efficacy trial for celiac disease.
In clinical studies in more than 800 patients, larazotide demonstrated a favorable safety profile comparable to placebo, due to what Innovate believes is its lack of systemic absorption from the small bowel.
Larazotide has received Fast Track designation from the Food and Drug Administration that will speed its regulatory review.
It will be the first drug to enter a Phase 3 trial for celiac disease, said Kendyle Woodard, a co-founder and director at Innovate.
“Other than a gluten-free diet, to which not all celiac patients respond, there is no current treatment for celiac disease,” Woodard said. “If approved, larazotide has the potential to be a first-in-class drug for this indication. Our main focus now is to begin the Phase 3 trials in order to bring a much-needed therapy to this underserved patient population.”
ᐧInnovate is also exploring the potential use of larazotide for treating nonalcoholic steatohepatitis, a serious liver disease, Woodard said.
Profile of ulcerative colitis drug candidate
Innovate’s second drug candidate, INN-108, is for the potential treatment of mild to moderate ulcerative colitis, a chronic inflammatory bowel disease that mainly affects the colon.
INN-108 is a novel small molecule that combines two active agents: mesalamine, or 5-aminosalicylic acid, an approved agent for ulcerative colitis; and 4-aminophenylacetic acid, an immunomodulatory agent approved in Japan for rheumatoid arthritis. The two agents are chemically bonded but are separated enzymatically when they reach the colon, or large intestine.
Innovate reported that preliminary data shows the combination therapy could be a more effective drug than approved mesalamine/5-ASA treatments alone.
INN-108 has successfully completed two Phase 1 clinical trials for mild to moderate ulcerative colitis in both healthy adult subjects and adults with ulcerative colitis. It is expected to enter a Phase 2 trial in 2018.
A liquid oral formulation of INN-108 for ulcerative colitis is in development for greater convenience for pediatric use.
INN-108 gained orphan drug status from the FDA in 2017. That designation provides incentives for companies developing treatments that are expected to provide significant therapeutic advantage over existing treatments and that target rare medical conditions affecting fewer than 200,000 U.S. patients per year.