Pardes Bio Allocating IPO Funds to Trial COVID-19 Drug, Ramp Up Staff
In late December, Pardes Biosciences went public via a business combination with FS Development Corp. II, a special purpose acquisition company (SPAC) sponsored by Foresite Capital. The raise brought in about $274 million.
And now, the company is funneling the funds into financing the next stage of clinical trials and commercial production of its lead oral antiviral drug, PBI-0451, for the treatment and prevention of SARS-CoV-2 infections. It expects to enter the Phase II portion of the trial by midyear.
Heidi Henson, the company’s Chief Financial Officer, said they are in meetings with contract research organizations, adding, “we’re still … trying to figure out what that bucket of cost looks like for us.”
They also want to use some of the money to add staff, especially in the areas of clinical development and commercial manufacturing. They are working to determine how many will be needed. They currently have 28 full-time staffers. Henson said, “We’ve been running very lean and mean over the last 18 or so months, so it’s time to add some expertise as we continue to develop programs.”
Prior to the IPO, it had raised $52 million in a single funding round in January 2021. That round included investments from Foresite, Khosla Ventures and GMF Capital.
Henson said they wanted to go public to gain better access to funds in the public markets and that the SPAC deal gave Pardes more money than it likely would have raised in the same time frame via a traditional IPO. “We received the term sheet from the SPAC and it was just too good to pass up.”
Foresite, on its part, which invested about $44.4 million in Pardes, indicated it believes Pardes will capture a portion of the COVID-19 antiviral market, which currently only has three products: Gilead’s Veklury (remdesivir); Merck and Ridgeback’s molnupiravir; and Pfizer’s Paxlovid. Although Gilead’s antiviral is a transfusion, the other two drugs are pills. Veklury was approved in October 2020, the first new treatment of any kind authorized for COVID-19. The U.S. Food and Drug Administration granted Emergency Use Authorization (EUA) to Pfizer’s Paxlovid on December 23, 2021. Shortly afterward, the FDA granted EUA to Merck and Ridgeback’s molnupiravir.
The use of SPACs to go public last year was a trend. These shell companies are designed to raise money that is put into a trust until they merge with a private company to take public. In 2021, these times of deals in the life sciences included Roivant Sciences combining with Montes Archimedes Acquisition Corp (MAAC); Aerami Therapeutics Holdings and FoxWayne Enterprises Acquisition Corp.; Blade Therapeutics and SPRIM Global Investments affiliate Biotech Acquisition Company; Science 37 and LifeSci Acquisition II Corp. Others include 23andMe and Virgin Group, Tango Therapeutics and BCTG Acquisition Corp, EaQRx and CM Life Sciences III, Nautilus Biotechnology and SPAC Arya Sciences Acquisition III and many others.