Sep 20, 2023 - Economy

Intarcia, a failed diabetes "unicorn," could be resurrected

Illustration of a unicorn shape filled with binary code interspersed with small red medical crosses.

Illustration: Annelise Capossela/Axios.

It's been nearly three years since the collapse of Intarcia, a diabetes-focused biotech that had burned through around $2 billion from venture capitalists.

  • Tomorrow may mark the beginning of its unlikely revival.

Why it matters: More than 30 million Americans have Type 2 diabetes, according to the CDC.

Driving the news: The FDA on Thursday will host a public hearing to discuss its past rejections of Intarcia's lead drug candidate.

  • Such meetings are highly unusual, and typically are about pulling an approved product from the market.
  • Former Intarcia CEO Kurt Graves says he believes this is the first public hearing request to be granted for an unapproved product. Graves chalks that up to "substantial issues of facts," although it may also reflect the diabetes community's political power.

Backstory: Intarcia developed a matchstick-sized implantable device that continuously delivers a GLP-1 medicine for up to six months, for the purpose of controlling blood sugar, whereas similar drugs require shots either daily or weekly.

  • In short, it promised both convenience and increased patient adherence. And the Boston-based company ran large clinical trials that proved efficacy.
  • But Intarcia's initial submission, which comically exceeded 1 million pages, was rejected by the FDA in late 2017 because of both product manufacturing quality concerns and the presence of acute kidney injury in some trial patients.
  • Intarcia resubmitted in 2019 and basically got the same result. By the end of 2020 it gave up — hiring advisory firm Sherwood Partners to wind down the company and find a buyer for its assets.
  • Kurt Graves meanwhile would become executive chairman of i2o Therapeutics, a Harvard University spinout that had developed an oral biologics delivery platform. He'd also continue working on the FDA appeals for Intarcia, even though the company no longer had official employees.

Fast forward: Last month, i2o made three major announcements:

  • It raised $46 million in Series A funding, named Graves as CEO, and acquired Intarcia's diabetes assets.
  • Acquisition terms weren't disclosed, but Graves says it included an upfront payment and possible earnouts/royalties were the FDA to change its mind. It's possible that some Intarcia investors — none of whom also backed i2o — could eventually benefit, but Intarcia creditors are first in line for "hundreds of millions" of theoretical dollars.

Theory of the case: Graves plans to argue that the FDA approved several other GLP-1 drugs, most notably Novo Nordisk's Ozempic and Wegovy, despite acknowledging acute kidney injury as a risk factor, including for patients without underlying renal disease.

  • He hopes that the FDA not only will approve Intarcia's lead candidate, given the comps, and also that it will declare that acute kidney injury is a so-called "class effect" of GLP-1 drugs.

The bottom line: It's unclear how long it will take the FDA to decide on next steps after the hearing, which you can watch via YouTube beginning at 9am ET Thursday, except that it will likely be measured in months.

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