Aristea CEO Talks Rare Disease Endpoints And Parallel Fundraising

San Diego-based Aristea Therapeutics, spun out of AstraZeneca in 2018 and led by founder, president, and CEO James Mackay, is less than one year away from a clinical trial read-out that could change the company’s trajectory, as well as advance a new drug candidate into late-stage trials for a rare disease with no approved products on the market. With nine employees, Phase 2 trials of lead candidate RIST4721 in multiple conditions, and a uniquely assembled $123 million funding runway, Aristea awaits next year’s Phase 2b trial results in palmoplantar pustulosis (PPP), a rare inflammatory disorder. Those results open the door to an exclusive option, held by Pfizer through its acquisition of Arena Pharmaceuticals earlier this year, to acquire Aristea upon completion of the Phase 2b trial. Mackay isn’t relying on a Pfizer acquisition; in fact, the company has already engaged regulators in the U.S. and Europe about Phase 3 endpoints and trial design in PPP. Interestingly, the FDA and the EMA, neither of which have approved any treatments to date for PPP, came to differing conclusions about the proper endpoints for use in Aristea’s Phase 3 trials of RIST4721. Aristea’s approach to fundraising and clinical strategy in a rare disease with no approved products is instructive for other small biopharmaceutical companies and startups, and for larger companies on the hunt for new pipeline products at a time when going it alone in the public markets is no longer biotech’s favored option.

Following an initial $15 million series A funding from Novo Ventures, Aristea began work on RIST4721, an oral, small molecule CXCR2 antagonist licensed from AstraZeneca; Aristea holds exclusive global rights. For its series B fundraising, led by Fidelity Management & Research Company, Aristea raised $63 million last July, when investment in the life sciences market had started to trend down. “Things were getting tough,” says Mackay. Aristea’s initial plan was to use the series B fundraising as a crossover round, and to take the company public. However, Aristea had another option. “We had a long-standing relationship with the team at Arena Pharmaceuticals. In fact, we started to talk to them within six months of founding the company,” says Mackay.

OPTING OUT OF AN IPO

Aristea was aware of the work going on at Arena, which at the time had a clinical hub in San Diego. The two companies had established a networking relationship, but Aristea was properly introduced to Arena by UBS, an investment bank that saw Aristea’s lead candidate as a potential fit for Arena’s portfolio. Arena was interested in Aristea too but had only begun to set up a dermatology franchise. Once it was up and running, about a year later, Arena was interested in learning more about Aristea’s clinical candidates. “What helped us do the deal with Arena is that our whole philosophy around RIST4721, and how it impacts neutrophils, was very similar to Arena’s philosophy around its lead candidate, etrasimod, and how it impacts lymphocytes,” says Mackay. “They completely understood the mechanism of action and the rationale for why we were doing what we were doing. That went a long way in helping the organizations realize that there was a good collaboration to be done.”

The parallel fundraising track that Aristea initially worked toward — a series B crossover round led by Fidelity, to be followed by an IPO, as one option, or a deal with Arena, as the other option — ultimately allowed Mackay to create a synthesis of the two. “I realized there was an opportunity to do something different, which was to do both the series B round, but not as a crossover, and to also do the Arena deal in parallel.” Mackay and the board of directors opted to do just that, skipping an IPO — a prescient move in hindsight — and conducting a non-crossover series B round. Aristea and Arena entered into a development collaboration, which provided $60 million to Aristea up front, as well as an exclusive option for Arena to acquire Aristea following the completion of the Phase 2b study of RIST4721 in PPP. But the key was bringing Arena into the equity round, says Mackay. “They invested $10 million in the series B round, and that allowed us to tie the two deals together.” The combined fundraising effort brought in $123 million, enough to fund the company for the next three years.

In March 2022, Pfizer completed a $6.7 billion acquisition of Arena Pharmaceuticals, and now holds the option to acquire Aristea following the Phase 2b trial. However, Mackay says his plan for drug development is always to take a product through regulatory approval and into the market, without relying on a Big Pharma partner. “That is the way that you should plan, because then you make the right decisions at the right time for development of the drug.” Of course, partnering opportunities or an acquisition can always be considered by the board of directors, should that opportunity present itself.

FDA AND EMA AT LOGGERHEADS

In the meantime, Mackay and his team are working with FDA and EMA regulators to determine what is needed for Phase 3 trials in PPP. While no drug to date has received approval for PPP in the U.S. or Europe, there is a drug approved in Japan: Janssen’s Tremfya (guselkumab). Prevalence of PPP in Japan is three to five times higher than in the U.S., which makes the country a popular testing ground for approved psoriasis biologics, says Mackay. Amgen and AbbVie are both currently conducting PPP clinical trials in Japan.

Mackay is focused on the U.S. and Europe and says that developing drugs for indications without an existing therapy requires diligent collaboration with regulators. “In rare diseases, often the natural history of the disease has not been well studied, meaning the agencies won’t have a good understanding of the natural history,” says Mackay. That’s significant, because it complicates agency decisions about acceptable clinical trial endpoints. Regulators may have an opinion about desired endpoints, but they aren’t necessarily based on any data in the specific rare disease. Mackay says FDA regulators were open to Aristea generating data on other endpoints that would help to move the discussion forward and inform the ultimate decision. When an approved product already exists in a specific disease area, there’s a precedent to follow, including endpoints and the size of the trial and safety database, says Mackay. “In our case, none of that exists.” In PPP, the endpoint used to date is rooted in the palmoplantar pustular psoriasis area and severity index, or ppPASI. However, when Aristea met with the FDA, the agency said it would prefer a variant of the physician global assessment (PGA), or a palmoplantar pustular PGA, instead. European regulators, on the other hand, fully supported use of the ppPASI for Phase 3 trials.

Given those conflicting opinions, Aristea will have to carefully navigate how to move through Phase 3 planning. That could mean separate trial endpoints in different countries, or “we may end up with some sort of co-primary endpoint,” says Mackay. “That’s what it’s looking like in terms of the discussions we’ve had so far.” Despite the incongruity between regulators, both have provided important clarity during consultations with Aristea, says Mackay, who expects the conversations to continue, with more conclusive guidance, following Phase 2b trial results. “The regulators are learning from our studies as well, so it inevitably results in a collaborative approach.”