BridgeBio’s $299m Gives It Two More Years Of Runway To Launch New Companies

The company emerged in 2017 with $135m to spin out rare genetic disease-focused subsidiaries. Now with 18 start-ups and two near-term filings for drug approvals, BridgeBio will fund existing programs as they progress and continue to buy new assets.

BridgeBio Pharma, now a parent company to 18 subsidiaries after its inception in 2017, has closed a $299.2m financing round from new and returning investors – funding that CEO Neil Kumar predicts will extend the company’s runway by two years or more.

Palo Alto, Calif.-based BridgeBio may have underestimated how many opportunities would be available when the firm raised its first $135m about a year and a half ago to advance early-stage research in rare genetic diseases to early go/no-go decisions by acquiring drug candidates, funding their development programs and spinning them out in subsidiaries focused on those individual assets. The hub-and-spoke spinout model is similar to the strategies employed by Roivant Sciences GMBH and Fortress Biotech Inc.  (Also see "The Next Roivant Or Fortress? BridgeBio Raises $135m To Spin Out New Companies" - Scrip, 18 Sep, 2017.)

Although BridgeBio's model begins mainly at the early academic research stage where the company assembles small teams to move each project forward, BridgeBio already has two programs it thinks will be filed for approval in the next two years and two more on the cusp of initiating Phase III trials, Kumar told Scrip.

That progress led to the new financing announced Jan. 23 led by previous BridgeBio investors KKR and Viking Global Investors and joined by new backers Sequoia Capital and an unnamed "blue-chip, long-term investor." Prior investors Perceptive Advisors, AIG, Aisling Capital, Cormorant Capital and Hercules Capital also participated in the round.

While acknowledging some structural similarities to Roivant, such as centralized R&D operations, the exec said he sees Ultragenyx Pharmaceutical Inc. and BioMarin Pharmaceutical Inc. as the stronger comparisons due to a shared therapeutic focus in genetic disease. Roivant so far has pursued a broader therapeutic focus. (Also see "Roivant's New Respiratory-Focused Vant Adds Chronic Cough Candidate To The Portfolio" - Scrip, 17 Sep, 2018.)

“[Roivant CEO] Vivek [Ramaswamy] and I seem to have some of the same concepts around decentralization and incentivization and corporate efficiency," Kumar said. "We’re trying to exploit that in a very specific space, and what really drove us to start this company was a gap in innovation that we could fill with capabilities and financing in the very early stages of genetic disease. That, I think, is the difference between us.”

Both BridgeBio and Roivant use a corporate model based on concepts developed by MIT researcher Andrew Lo, who is a co-founder of and investor in the former and a board member for the latter.

“The concept to date has been that we try to hew very close to a scientific analysis of what’s going on and when something is not working, we park it,” he said. “In a couple of those cases, we simply were not able to recreate the data coming out of the laboratory that was working on it. In other cases, we took things forward and for whatever reason we weren’t able to find the right chemistry or there was a manufacturing hiccup or a tox signal.”

Now, with about two more years of cash available, BridgeBio will continue advancing the programs in which it sees the best chances of success and bring in additional assets.

“We were able to pick up quite a few more programs than we initially projected," Kumar said. "And the success of those programs – either we’ve been slightly lucky or we’ve picked reasonable programs – has been relatively high in terms of moving from early-stage preclinical assets into later-stage development assets."

QED, Origin Programs Near FDA Filing

BridgeBio’s two programs that may be ready to file for approval in the next 24 months include the FGFR inhibitor infigratinib housed at QED Therapeutics, which is being studied for second-line cholangiocarcinoma. The other is a synthetic cyclic pyranopterin monophosphate (cPMP, a synthetic enzyme co-factor) replacement therapy for patients with molybdenum cofactor deficiency (MoCD) type A at Origin Biosciences. (Also see "Deal Watch: BridgeBio To Launch New Subsidiary Around Rare Disease Candidate Obtained From Alexion" - Scrip, 18 Jun, 2018.)

QED was launched with $65m in funding after infigratinib was in-licensed early in 2018 from Novartis AG. (Also see "Start-up QED Touts Singular Focus On FGFR Inhibitor Infigratinib " - Scrip, 6 Jun, 2018.) Kumar said in-licensing assets from big pharma companies was not part of BridgeBio’s original strategy, but it wants to be flexible about taking advantage of whatever opportunities turn up.

“For a big pharma company, there’s going to be a certain peak-year sales cutoff, a certain set of economics beyond which it ceases to make sense given their cost structure, and because we have a dramatically different cost structure, we’re able to take some of those programs on,” he explained.

To date, BridgeBio has sourced the development programs for its subsidiary companies from academia, big pharma and its own internal discovery efforts, Kumar noted.

As those assets have advanced, BridgeBio has adjusted its model to account for fast-moving programs that could entail Phase III development programs that are more costly than it wants to take on.

For instance, it agreed in November to give Denmark’s Leo Pharma AS an option to acquire PellePharm Inc. and its Phase III-ready patidegib for a rare genetic skin cancer, Gorlin syndrome, in exchange for $70m in equity financing and R&D funding. (Also see "Leo Lines Up PellePharm Buy In Rare Skin Cancer Deal" - Scrip, 20 Nov, 2018.))

At another BridgeBio portfolio company, Eidos Therapeutics Inc. launched an initial public offering in June, netting $113.5m, to finance continued development of the small molecule transthyretin stabilizer AG10 for hATTR amyloidosis. (Also see "Start-Up Eidos Surfs Crest Of TTR Amyloidosis Wave" - Scrip, 27 Aug, 2018.)