Versant, Novartis team up again in hunt for another Chinook

Novartis and venture capital firm Versant have set up a new biotech – Borealis Biosciences – using a similar model to their earlier alliance to create Chinook Therapeutics.

Like Chinook, Borealis is focusing on drugs for kidney disease. It has been set up with $150 million in Series A funding to apply Novartis' xRNA platform, which can target the body's natural mRNA to alter the production of proteins that cause disease, within a small and agile biotech.

Borealis also starts life with an R&D collaboration with Novartis that gives it $100 million in upfront funding and up to $750 million in milestone payments if Novartis takes up the option of acquiring two "development-ready" kidney disease programmes. There's no indication yet what diseases will be targeted.

The hope for Novartis is that – also like Chinook – Borealis will blossom and be taken over in future in what has become known as a 'build-to-buy' strategy in biopharma.

Versant and Novartis joined forces in 2019 on the formation of Chinook, which was focusing on the development of two drugs for rare kidney disease IgA nephropathy (IgAN), endothelin A receptor antagonist (ERA) atrasentan and zigakibart (BION-1301), a subcutaneously administered anti-APRIL antibody.

Chinook went public in 2020 and was acquired by Novartis in a $3.2 billion deal last year, right before a positive phase 3 readout for atrasentan that set up regulatory filings and the possible approval of a drug that could complement the Swiss group's recently approved Fabhalta (iptacopan) IgAN therapy.

Vancouver, Canada-based Borealis is viewed as "an independent follow-on company to Chinook," said Novartis' chief strategy and growth officer Ronny Gal, who noted that Borealis has been formed with staff from Chinook and has also inherited the latter's Vancouver manufacturing site.

"A first of its kind for Novartis, this three-part transaction of divestment, collaboration and investment is a testament to our company's unwavering focus on advancing renal science," said Gal.

Versant has become something of a specialist in the build-to-buy model, and earlier this year forged a similar alliance with AstraZeneca with the formation of SixPeaks Bio earlier this year.

The Swiss biotech emerged with $110 million in funding, $80 million from AZ, and a mission to develop a new generation of weight-loss therapies for obesity that help patients reduce fat while preserving muscle, led by an anti-activin IIA/B receptor antibody. AZ has an exclusive option to buy SixPeaks outright within the next two years.