Intarcia raises $200m to advance its diabetes drug
Intarcia Therapeutics Inc., a biotechnology company that recently opened a headquarters office at the Boston Innovation Center to take advantage of the region’s deep pool of life-sciences talent, said Tuesday that it has completed a private round of equity financing for $200 million, one of the largest investments in Massachusetts recently.
Intarcia is developing match-stick-size mini-pumps that are inserted under the skin to deliver the company’s new drug for controlling type 2 diabetes and obesity.
Many diabetics have to inject themselves with drugs once a day. The Intarcia drug pump, known as ITCA 650, is designed to deliver a steady flow of a still-experimental drug called exenatide over the course of six to 12 months. So instead of daily injections, patients would undergo a two- or three-minute procedure at a doctor’s office once or twice a year, said Kurt Graves, the company’s chief executive.
What makes this extended release possible is an advance that keeps the drug stable at body temperature, Graves said.
“This is the Holy Grail of peptide chemistry,” he said.
It is projected that about 472 million people around the world will have type 2 diabetes by 2030, Intarcia said.
Only four companies raised $200 million or more in 2013, and none of them were in Massachusetts, according to data compiled by PriceWaterhouseCoopers and the National Venture Capital Association.
Intarcia’s news release also included data from United Healthcare, a provider of health care plans and benefits. According to United Healthcare, spending on diabetes and diabetes-related care could reach $500 billion by 2020 in the United States alone.
RA Capital led the funding round as a new investor and was joined by Farallon Capital Management, Foresite Capital, Franklin Templeton LLC, Fred Alger Management, New Leaf Venture Partners, Quilvest, and three institutional investors that were not identified, Intarcia said.
Intarcia said it also raised $210 million in late 2012.
“Intarcia has created a remarkably promising diabetes product with the potential to simplify glucose control and be a cost-effective solution with ensured compliance built-in, which would be inconceivable by any other means,” Peter Kolchinsky, managing director of RA Capital, said in a statement.
“We expect this product to be welcomed by patients, physicians, and importantly payers who desperately need new ways to overcome the huge financial burden associated with diabetes.”
Graves said he expects Intarcia to seek regulatory approval to launch the company’s product in 2015 or 2016.
Intarcia has facilities in Hayward, Calif. Last summer, it decided to transfer its headquarters operations to Boston as a part of a plan to “have a footprint” in the country’s two life sciences hotbeds: the San Francisco Bay Area and the Boston-Cambridge market, Graves said.
The company’s head count is 80 employees, with about 20 of them in Boston.
Graves predicted the Boston office would grow to 30 to 40 employees by the end of this year and to 80 to 100 people by the end of 2015.
“Most of our growth will be in Boston,” he said.