Intarcia kicks off new funding that could bring $4b valuation
Intarcia Therapeutics Inc. has raised another $215 million en route to seeking US approval for a drug-device combination it hopes will revolutionize diabetes treatment.
The privately held company relocated from California to Boston in 2014, and last year moved its headquarters to larger offices on the South Boston Waterfront. On Thursday, Intarcia said its latest financing — led by Scottish-based mutual fund Baillie Gifford — is the start of a two-stage investment round totaling $500 million to $600 million.
When the second stage closes in the fourth quarter, Intarcia’s overall funding will total more than $1.5 billion from private investors ranging from Boston giants Fidelity Investments and Baupost Group to Chicago’s Pritzer Organization and China’s Lucion Venture Capital Group. That would give Intarcia a valuation topping $4 billion, according to the company.
Intarcia said it plans to apply to the Food and Drug Administration in the next 30 to 60 days for its lead product, a drug-loaded minipump called ITCA 650 that treats type 2 diabetes, which affects the vast majority of the more than 380 million people with diabetes worldwide. The global market for type 2 diabetes has been projected at $65 billion in annual sales by 2025.
ITCA 650, which can be implanted under the skin, uses a technology that can stabilize proteins, peptides, and antibody fragments at body temperature for years, enabling medicines to be delivered in small doses continuously and absorbed by patients over long periods.
Intarcia chief executive Kurt Graves said the company’s proprietary drug delivery system has been branded Medici, after the prominent Italian family that bankrolled the art of Renaissance masters such as Botticelli, Leonardo da Vinci, and Michelangelo.
“We’re bringing a Renaissance in the delivery of medicine for chronic diseses,” Graves said in an interview, citing figures showing 60 to 80 percent of patients stop taking medications within six to 12 months. “We’re trying to open up a whole new platform for delivering these medicines by taking the problem of patient noncompliance off the table.”
US regulators are expected to rule on Intarcia’s application for ITCA 650 approval by late next year. If all goes well, the company could go public in 2018, said Graves.
Intarcia’s valuation is high largely because clinical studies have demonstrated its delivery system could work not only for its type 2 diabetes medicine, but for other single drugs called monotherapies and for combination treatments in its development pipeline.
Those experimental medicines, which would be submitted for regulatory approval after ITCA 650, seek to treat diabetes, obesity, and autoimmune and inflammatory diseases such as rheumatoid arthritis, psoriasis, and inflammatory bowel disease.
“We’re going into a whole new growth trajectory in the next few years,” Graves said.
Intarcia got a public relations boost in June when Microsoft Corp. cofounder Bill Gates, who leads a foundation focused on treating diseases in the developing world, visited its Seaport offices and talked to company executives during a trip to Boston. Graves said he and Gates had “a really good discussion,” but he declined to disclose specifics.
The company employs between 300 and 400 employees, including nearly 100 in Boston, according to Graves. The majority work at Intarcia’s former headquarters in Hayward, Calif., outside San Francisco, where it has a manufacturing plant. Most of its research and development is conducted at sites in North Carolina and Switzerland.
Graves said the company’s Boston workforce is expected to more than triple by 2018 as Intarcia builds out its commercial workforce to market drugs when they are approved.
“The bulk of the future growth will come out of Boston,” said Graves, “and the fastest growth will be in our customer-facing organization, which will be in Boston.”