Foresite Capital and Gilead Back Pardes Biosciences in $250M SPAC Deal to Advance Oral Antiviral Candidate PBI-0451 for COVID-19

Compiled by | River

Gilead Sciences and a venture capital firm are backing a dark horse initiative to win the race for the first, or at least the best, effective drug against COVID-19.

On June 29, foreign media reported that Foresite Capital announced it would take Pardes Biosciences, founded just last year, public via one of its SPACs (Special Purpose Acquisition Companies). Foresite raised $175 million for the SPAC, along with $75 million in private funding from Gilead Sciences, RA Capital, and Frazier Lifesciences.

According to filings submitted to the U.S. Securities and Exchange Commission, the company was founded in early 2020 by former Gilead Sciences executive Uri Lopatin, who previously co-founded and served as Chief Medical Officer of Assembly Biosciences and was a key player in the search for a hepatitis B cure until clinical trials failed last November after nearly a decade.

After leaving Assembly in 2019, Lopatin, who has continued to serve as a part-time partner at Y Combinator, founded Pardes to develop an oral protease inhibitor targeting COVID-19. Protease inhibitors have proven to be among the most effective tools against HIV and HCV. Investors backed Lopatin with a $57 million Series A financing round. Pardes lists Khosla, GMF Capital, Y Combinator, and Foresite as investors on its website.

However, the SPAC transaction is noteworthy, as Pardes Biosciences lags significantly behind in the development of a COVID-19 therapeutic. Merck has advanced a compound from one of China’s leading coronavirus laboratories into late-stage development. Roche has entered into a new collaboration with Jean-Pierre Sommadossi, co-founder of the former Pharmasset, and advanced a molecule into Phase II trials. Pfizer is also at the forefront: the pharmaceutical giant stated earlier this year that it aims to launch its oral COVID-19 drug by year-end.

Pardes believes that delays in vaccine availability are not as critical as they appear, as factors such as the rapid waning of vaccine efficacy, inequitable distribution, and the emergence of new variants continue to sustain a substantial demand for novel coronavirus therapeutics. Lopatin also envisions selling it to governments. The United States has just announced a $3.2 billion initiative to accelerate the development of antiviral drugs for future coronavirus outbreaks. Pardes stated that PBI-0451 targets a viral region that is highly conserved across most coronaviruses, making it a promising tool for combating future pandemics.

However, all of this remains unproven. Pardes has not yet entered medical institutions, nor has it disclosed data comparing PBI-0451 with antiviral drugs from Pfizer or Roche. Their listing on the Nasdaq reflects both a renewed investor interest in antiviral therapeutics and the ability of companies to go public at earlier stages than before, effectively transferring the risks associated with preclinical-stage biology from venture capitalists to the broader investor base.

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