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Sector: Pharma/Biotechnology
Area: Obesity/ Fatty Liver Disease. Obetat Biopharma
Description
Pre-clinical stage company developing an innovative new class of potent and safe anti-obesity peptide based drug meeting unmet needs of treating Obesity, Preder-Willi Syndromes, and Fatty Liver Disease.
Clinical need
Obesity is one of the most prominent public health problem affecting children and adults globally. A 2014 Lancet study estimates that 2.1 billion adults in the world were overweight. In the US alone, the population of severe or morbid obesity (BMI =35 or above) is 40M and expected to reach 60M by 2020 with direct medical costs $250Billin in USA (vs 18 M cancer patient with medical costs $180 Billion).
Scope of Problem/Opportunity
Obesity is one of the highest unmet needs disease. It was predicted that the obesity market would grow to $8.4B by 2022 with a 35.3% CAGR, which is attributed mainly to anticipated launches of novel drugs during that time period.
Present: Currently there is no obesity drug reducing weight by increasing energy expenditure(IEE).
Future: New generation of obesity drugs working non-centrally and reducing weight by increasing energy expenditure (rather than the current therapy working centrally reducing appetite with high ratio of side effect profile) are being developed. The new generation drugs are injectable and/or peptide drug targeted for severe obesity.
Evidence that this will work
Animal data shows rapid and substantial fat specific weight lose efficacy of 10~25% of body by reducing fat mass (-75%). Toxicology studies shows excellent safety profile
Current Status
The company is currently raising money to fund pre-clinical studies required for IND filing with US FDA and Phase 1 clinical trial for obesity.
Milestones Catalysts
Year 1-2. Complete IND enabling pre-clinical trial ($5Mil) and IND approval by US FDA.
Years 2-4: Complete Phase I and II clinical trials.
Year 3-5: Exit (IPO / Licensing agreement / Co-development)
Major challenges
Primary challenge is to raise capital to complete IND enabling pre-clinical trials and to fund their development efforts. Pre-clinical development will require $4-5M, and the Phase 1 study another $10M.
Marketplace Dynamics
Customers
The treatment would be reach the marketplace through traditional drug distribution models.
Competitors
Novo Nordisk, Janssen, Zafgen, Arrowhead, Rhytm, Arena, Vivus, Orex.
Finance
Approximately $3M has been invested to date. Seeking total investment of $5M by end of 2016. With successful fund raising, matching funds from Korean government could be pursued for the pre-clinical and Phase 1 clinical studies without diluting equity.
Ownership
The company is owned by the founding team that includes the CTO(inventor) and CEO who have long history of collaboration.
Exit timeline. Liquidity outlook.
The company would be likely open for a partnership or exit to a larger pharma organization upon completion of Phase 1 or 2 clinical trial in 2020-2021
X factor. Return multiple.
Obesity drug sales forecast $3~5billion is expected in US and $5~8 billion worldwide by 2026. We expect if successful, this treatment would $0.75 - $1.5 billion valuation providing a 15x to 30x return to investors in the current round in the event of a sale to a large pharma company (Hanmi & Janssen deal in 2015)
History and Origins
Company’s research group leader investigated and found that particular protein encoded by HIV-1 genome can induce a significant weight loss in animal models, mimicking wasting (also called as slim disease) observed in individuals infected with HIV-1. Company succeed in developing a synthetic peptide representing a core portion of the particular protein, as a highly promising anti-obesity or metabolic syndrome drug with no or little side effect.
Intellectual property
The company acquired world-wide rights from Yonsei University (Seoul, Korea) and filed patent relating to utility of the compounds in obesity.
Organization
The company was founded in 2013 and is operated virtually with office both in Seoul, Korea and NJ USA. The company has 2 FTE and 3-part time collaborators.
Key takeaways
Development of safe and effective treatment is urgently needed to meet the huge unmet needs of patients. With the recent advancement on the fat metabolism, new classes of obesity drugs” increasing energy expenditure” by working peripherally (thus avoid CNS related side effects) are being developed with promising prospects.
Executive Summary Catalogue Inclusion