WindTree Therapeutics has the clinical results it wants—but is missing the bull market, meaning the biotech is exploring strategic options.
Amid the market downturn, the biotech is considering a plethora of strategic options, including selling off lead candidate istaroxime, a cardiogenic shock medicine that just hit its phase 2 target of raising systolic blood pressure.
“A bunch of companies want to talk now off of that,” Craig Fraser, WindTree’s president and CEO, told Fierce Biotech. “It’s kicked up certainly more than a dozen engagements.”
In April, the biotech posted data from Seismic, its phase 2 study assessing istaroxime in 60 patients with cardiogenic shock, a life-threatening condition that occurs when the heart isn’t able to pump enough blood and oxygen to the brain and other organs. Istaroxime met the main goal of the trial, and, a month later, the biotech revealed at the European Society of Cardiology Heart Failure in Madrid that the study also met several secondary endpoints associated with improved cardiac function.
After the data drop, WindTree assessed the financial market—and didn’t like what it saw. The entire industry has been facing a reckoning amid widespread layoffs, clinical setbacks and a tough market downturn. In the last three months, the bear market has forced at least 27 biotechs to lay off staff.
However, the 28-person biotech doesn’t have layoffs in mind for its restructuring.
“I don’t want to send a signal on the market that we’re pausing what we’re doing and have a ‘for sale’ sign out in the yard. That’s not necessarily it.”
— Craig Fraser, CEO of WindTree
“We’ve got ourselves now down to a pretty darn lean organization as a public company that’s active in development. We’ve already done our cost cuttings,” the CEO said. “I mean, our headcount right now is 29% lower than when we started the year.”
Now is the time to reap the fruits of their labor not cut more, and WindTree isn’t underselling itself—or istaroxime.
“While the program and its development pathway are quite attractive and have resulted in positive scientific and biopharma industry response, we believe the opportunity is under-recognized and under-valued in the current financial markets,” Fraser said in a June 29 release.
The biotech is contemplating its options that will move the program forward and realize the greatest shareholder value, Fraser said. Several possibile forms of partnership—global and regional licensing, and M&A—are all on the table.
“I don’t want to send a signal on the market that we’re pausing what we’re doing and have a ‘for sale’ sign out in the yard,” Fraser clarified. “That’s not necessarily it.”
Instead, the CEO, who has previously held leadership roles at biotech Novelion Therapeutics and Big Pharma Pfizer, said he knows the worth of a candidate about to step into phase 3 trials—though the biotech still has to meet with the FDA for its end of phase 2 meeting.
Many Big Pharmas are hunting for just that: late-stage assets that will bring value in the near term, according to a recent M&A market analysis by PwC.
WindTree thinks there’s a high need for istaroxime in the cardiogenic shock market, which has an estimated value of $1.25 billion. The disease, typically caused by heart attack, has mortality rates that range from 7% to 40% in the U.S. Existing therapies come with unwanted side effects such as risk for arrhythmias, decreasing blood pressure, renal dysfunction and higher chance of death. WindTree’s therapy is also being developed as a treatment for acute heart failure.
So, who is WindTree in talks with? Though Fraser couldn’t disclose specifics, he highlighted the renewed focus of Big Pharmas on cardiometabolic and cardiovascular indications. Other potential companies include medium-sized specialty ones, Fraser said, or companies with hospital-based channels.
The biotech has other candidates in its pipeline beyond istaroxime, including rhastaproximin, a drug aimed at treating genetically associated hypertension. The phase 2 therapy could be one of the first hypertension drugs on the market, according to Fraser. But it isn’t a good fit for the biotech world, so WindTree is in discussions with potential partners to find “the right kind of strategic fit” with the ultimate goal of outlicensing the drug.
Fraser said it was still too soon to reveal a timeline for licensing, partnerships, or whatever strategic options the biotech ultimately deems fit for that asset.