Novartis and Versant Ventures Launch Borealis Biosciences with $150M to Pioneer xRNA Therapies for Kidney Diseases

On August 22, Novartis announced the joint establishment of Borealis Biosciences with investment firm Versant Ventures. Based in Vancouver, Canada, Borealis Biosciences is a discovery-stage biotechnology company developing next-generation kidney disease drugs based on xRNA. xRNA is Novartis' core technology platform, capable of targeting natural mRNA in the human body to modulate the production of disease-causing proteins for therapeutic purposes.

According to the cooperation agreement, both parties will jointly provide 150 million US dollars for the Series A financing of the new company. Novartis will provide Borealis Biosciences with up to 100 million US dollars in upfront funding, along with additional near-term research funds. As part of the agreement, Novartis will also have the option to acquire two pipeline projects for a total consideration of up to 750 million US dollars, including clinical and regulatory milestones.

The collaboration that led to the founding of Borealis Biosciences was born out of the successful acquisition of Chinook Therapeutics. Chinook Therapeutics is a clinical-stage biotechnology company focused on kidney diseases, established by Versant in 2019 and acquired by Novartis in August 2023 for a total deal worth up to $3.5 billion.

After acquiring Chinook, Novartis gained two high-value late-stage clinical assets:Atrasentan (an oral endothelin A receptor antagonist for the treatment of IgA nephropathy, submitted for marketing approval in the first half of this year) and Zigakibart (an anti-APRIL monoclonal antibody that has entered phase 3 trials for IgA nephropathy).In addition, Chinook has a wealth of reserves in kidney disease modeling and research, with early pipelines for treating various severe kidney diseases.

The announcement clearly pointed out that, after completing the acquisition of Chinook, Novartis quickly recognized the significant scientific potential of the Chinook team in early research talent, on-site facilities, and capabilities. Therefore, they jointly provided funding for the establishment and launch of Borealis Biosciences.Through this innovative collaborative investment, Novartis will expand its pharmaceutical research and development presence in Canada. Building on Chinook’s scientific talent, Borealis has now transferred some of its employees and the Vancouver facility to Borealis Biosciences, enabling researchers to continue their drug discovery efforts. This move advances cutting-edge kidney research and exploration of the xRNA platform, increasing the likelihood and speed of discovering new treatments for kidney diseases.

It is reported that Chinook's Vancouver research base covers an area of 23,000 square feet and was previously leased by Chinook. The facility includes wet laboratories with capabilities in molecular and cellular biology, experimental animal breeding, and chemical analysis.

Dr. Jerel Davis, Managing Director of Versant and Board Member of Borealis, mentioned in a statement, "Over the past six years, we have realized that some of the most effective targets for kidney diseases are not suitable for traditional small-molecule or biologic drug modalities." Although specific targets have not yet been disclosed, Borealis will build on Chinook’s research foundation to develop drugs targeting subpopulations of kidney diseases.

To understand the direction of Borealis, we must first return to Chinook Therapeutics.

In addition to the two IgA nephropathy pipelines in Phase 3 clinical trials, Chinook's research and discovery efforts focus on building a precision medicine pipeline for rare, severe chronic kidney diseases with well-defined genetic and molecular drivers.Data shows that Chinook is leveraging insights from single-cell RNA sequencing of kidneys and a large cohort of chronic kidney disease (CKD) patients to develop therapeutic candidates with mechanisms of action targeting key renal disease pathways. This large CKD patient cohort has undergone comprehensive whole-genome phenotyping, with biological samples and prospective clinical follow-up retained.

Based on large patient cohort databases and advances in RNA drug chemistry, the R&D team has significantly improved its understanding of patient subgroups, different underlying pathologies, therapeutic targets, and delivering therapeutic payloads to specific kidney cell types. Despite recent progress in IgA nephropathy patients, many other forms of highly prevalent kidney diseases remain unresolved.

The iteration from Chinook to Borealis also signifies Novartis and Versant's exploration into a broader range of kidney diseases. In an interview, Jerel Davis also highlighted this key transition: IgA nephropathy will not be a focus area for Borealis.

Borealis' initial team of 25 people has over 10 years of cutting-edge experience in kidney disease research and RNA therapy. Meanwhile, Borealis' scientific advisory board consists of global leaders, including targeted delivery of RNA therapies, mechanistic insights into kidney diseases, and cutting-edge translational science based on human data.These capabilities enable Borealis to identify target opportunities within subpopulations of kidney disease patients and define methods to enhance the delivery of RNA drugs to specific cell types.

8On the 7th, Novartis announced that the FDA granted accelerated approval to Fabhalta® (Iptacopan) for a new indication, aimed at reducing proteinuria levels in adult patients with IgA nephropathy, marking it as the world's first complement therapy targeting IgA nephropathy.Before Iptacopan was approved for the IgA nephropathy indication, there were only two approved drugs globally for IgA nephropathy: the targeted sustained-release budesonide capsule (Nefucon®) from Everest Medicines/Calliditas and Sparsentan from Travere. These three effective targeted therapies, with different mechanisms of action, will provide patients with multiple treatment options.

As a popular field in chronic kidney disease, IgA nephropathy (IgAN) is currently the most common primary glomerulonephritis worldwide. The incidence of IgA nephropathy shows significant regional differences, with the highest incidence found in Asian populations, and China being the country with the largest number of IgA nephropathy cases in the world.

IgAN is a progressive disease in which the immune system attacks the kidneys, typically causing glomerular inflammation and proteinuria. Due to varying disease progression, IgAN is highly insidious in its early stages, with individual treatment responses differing significantly. Despite current standard treatments, up to 50% of IgAN patients with persistent proteinuria progress to renal failure within 10 to 20 years of diagnosis. These patients often require maintenance dialysis or kidney transplantation.

According to a Frost & Sullivan report, the number of IgA nephropathy patients worldwide increased from 8.8 million in 2015 to 9.3 million in 2020, and is expected to reach 10.2 million by 2030, of which there are approximately 4 to 5 million patients in China alone.The global IgA nephropathy therapeutic drugs market is expected to grow rapidly, increasing from US$567 million in 2020 to US$1.196 billion in 2025, with a compound annual growth rate (CAGR) of 16.1% from 2020 to 2025.The market for IgA nephropathy treatment drugs in China is also expected to increase from US$0.37 billion in 2020 to US$1.09 billion in 2025, with a compound annual growth rate of 24.6%.

In addition to Iptacopan, Atrasentan, an oral selective endothelin A receptor antagonist acquired by Novartis through the acquisition of Chinook, has also been submitted for marketing approval in the first half of the year and is currently under FDA review. Phase III trial data demonstrated positive clinical efficacy, showing a 36.1% reduction in proteinuria in patients with IgA nephropathy after 36 weeks of treatment.

In January this year, Novartis announced the acquisition of Chinook Therapeutics (established by Chinook and several life science investors), integrating it entirely into Novartis China. Through this acquisition, Novartis has secured the exclusive rights to develop and commercialize Chinook’s core assets—Atrasentan and Zigakibart (BION-1301)—in China and across Asia, strengthening its presence in the field of renal diseases in China.

In the announcement, Ronny Gal, Novartis' Chief Strategy and Growth Officer, said, "The creation of Borealis as an independent follow-on company to Chinook represents an innovative approach to transaction structuring. This is a first-of-its-kind deal for Novartis. The three-part transaction involving divestiture, collaboration, and investment demonstrates Novartis' unwavering commitment to advancing kidney science."

For Versant, this MNC collaboration model is not unfamiliar. In May, SixPeaks Bio, a company dedicated to developing weight-loss therapies, completed a $30 million Series A financing round led by founding investor Versant and entered into a strategic partnership with AstraZeneca. AstraZeneca participated in the Series A round and committed to providing up to $80 million in upfront and near-term payments over the next two years. As part of the collaboration, AstraZeneca has the right to acquire SixPeaks at a predetermined price during this period (upon SixPeaks filing an IND application for its lead antibody).

By jointly providing early strategic funding, MNCs gain acquisition rights to new companies/pipeline acquisition rights, as well as a series of potential additional rights such as predetermined pricing, priority rights, and co-development opportunities.The commonality behind the two deals is that the Biotech companies have Versant's backing, pipeline reserves, and phased achievements — SixPeaks, established by Versant in 2022, has developed an anti-activin receptor IIA/B antibody conjugated with a GLP-1 peptide; Borealis is an iteration of the star project Chinook. In terms of fields, both SixPeaks and Borealis are at the forefront of exploring therapies in popular tracks.

Therefore, the new model remains an extension of MNCs' "early observation" and "early investment" approach amid the global BD boom. Through early involvement in forms such as "strategic funding," "collaborative funding," and "team co-building," one can glimpse MNCs' long-term strategic layout to seize emerging therapy fields on a global scale.

References:

https://www.biospace.com/business/novartis-versant-launch-rna-kidney-medicines-focused-borealis

https://www.businesswire.com/news/home/20240822013670/en/Versant-Ventures-and-Novartis-Launch-Borealis-Biosciences-With-150-Million-in-Funding

https://endpts.com/versant-novartis-launch-borealis-biosciences-for-rna-therapies-in-kidney-diseases/