Otsuka all in on Visterra's kidney disease pipeline

Japanese group prefers M&A over license

Corporate strategy

Visterra’s venture investors will probably regard $430m in cash from Otsuka as a more than acceptable consolation prize for failing to float at the beginning of 2017. All it took was a second, $24m tranche of Visterra’s series C round and some non-dilutive funding for its infectious disease pipeline for the Japanese group to come in as an acquirer focused on its main prize – a preclinical asset in renal disease.

What started as negotiating a licence over VIS649 evolved into merger discussions as Otsuka evaluated Visterra’s antibody design platform, Kabir Nath, Otsuka America’s chief executive, told EP Vantage. And as the Japanese group has just received US approval for the kidney disease drug tolvaptan (Jynarque/Samsca), along with a partnership on Akebia’s anaemia project vadadustat, it saw an opportunity in Visterra to build a larger portfolio in this space.

“We’ve determined that it was an appropriate time to look at other areas in renal disease,” Mr Nath said. “This is an area of huge unmet medical need, and an area of huge economic importance when you look at the costs.”

Kidney focus

This condition has seen a surge of interest, with such agents as Anthera’s blisibimod and Calliditas Therapeutics’ Nefecon in late-stage development. Otsuka can focus on this opportunity thanks to Visterra's infectious disease portfolio’s R&D now being fully funded.

Visterra’s involvement centres on VIS649, a preclinical candidate for IgA nephropathy, a condition currently treated with steroids to reduce inflammation, ACE inhibitors or ARBs to lower blood pressure and protein in the urine, and statin therapy to slow damage to the kidneys.

According to Visterra’s chief executive, Brian Pereira, VIS649 differs in that it was designed specifically for chronic treatment of IgA nephropathy while most other therapies are repurposed steroids or anti-inflammatories, which cannot be tolerated over the long term. “These patients are likely to need lifelong treatment,” he told EP Vantage.

VIS649 seeks to treat the condition by targeting an epitope on A proliferation inducing ligand. This stimulates production of aberrantly glycosylated IgA, which forms immune complexes that accumulate in and damage the kidneys.

Visterra says its technology allows for more precise targeting of epitopes critical to the functioning of the drug target.

Visterra pipeline
  Product Target Indication
Systemic anti-infectives
Phase II VIS410 Haemagglutinin Influenza
Pre-clinical VIS513 Envelope protein Dengue fever treatment
  VIS705 Glycan Pseudomonas infections
Kidney disease
Pre-clinical VIS649 A proliferative inducing ligand (APRIL) IgA nephropathy
  IL-2R Interleukin-2 Graft vs Host, lupus nephritis
  C5aR Complement component 5 Anca associated vasculitis
  C3 convertase C3 convertase C3 glomerulonephritis
Central nervous system
Pre-clinical VIS-NAV Nav1.7 Pain, general
Oncology
Pre-clinical VIS-624 CD138 Multiple myeloma

Its influenza A project VIS410, foir instance, is aimed at an epitope on haemagglutinin that is common to all subtypes, which could make it resistant to viral mutation – VIS410 is in a phase II trial in hospitalised flu patients and has received fast-track designation from the US FDA.

Visterra received a contract worth up to $205m from the US government’s Biomedical Advanced Research and Development Authority to develop VIS410. Moreover, a second project in this space, VIS705 for Pseudomonas aeruginosa, is being backed by the Combating Antibiotic Resistant Bacteria Accelerator for up to $7.2m, while Vir Biotechnology has signed a licence that will support development of up to five anti-infective projects.

For Otsuka that work, being fully funded, is not its main focus. Separately in kidney disease, Visterra has in preclinical development projects that target IL-2r, for graft-versus-host disease, complement 5a receptor for ANCA vasculitis, and C3 convertase, for glomerulonephritis.

None has yet reached the clinic, making a $430m up-front cash offer look like a pretty big bet from Otsuka. Still, it is less than the $600m Otsuka paid for only a share of the economics of vadadustat, so in time Visterra could come to look like a bargain.

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