Q&A with Bill Gerhart
Chairman & CEO of Patara Pharma
Family Office Insights sits down with Bill Gerhant, Chairman & CEO of Patara Pharma, to discuss how his clinical-stage biopharmaceutical company is improving the lives of patients suffering from pulmonary fibrosis.
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Tell us about your background and your company, Patara Pharma.
I develop new therapeutics to relieve human suffering associated with debilitating, life-threatening respiratory diseases. This became my personal mission about 17 years ago when I was asked by an investor group to help rescue a struggling biotech startup. Although I made the recommendation to shut this company down, I did identify an opportunity in the science that I thought could be a real winner. Based on this opportunity, I formed Mpex Pharmaceuticals and eventually developed a new inhaled antibiotic therapeutic for cystic fibrosis (CF) patients, which is now approved and on the market.
I realized that the new drug I helped develop for CF patients at Mpex represented a way to significantly reduce the risks of pharmaceutical development. The new drug we developed for CF patients was actually a previously approved oral antibiotic that we reformulated for delivery with a proprietary aerosol device to treat a debilitating lung disease. This model of repurposing an old drug for a new disease is a lower cost and lower risk path to a significant product opportunity, providing investors with the potential for an early exit and a significant multiple on invested capital…biotech returns without biotech risk. For example, after Mpex I founded Elevation Pharmaceuticals, a company for which I raised $40 million in 2010/11 to repurpose an old IV drug for inhalation to treat chronic obstructive pulmonary disease (COPD). We successfully completed Phase 2 studies and sold the Company in 2012 to a large Japanese pharmaceuticals company for $430 million.
Patara is a clinical-stage biopharmaceutical company dedicated to significantly improving the lives of pulmonary fibrosis and lung cancer patients suffering from chronic cough, a $3 billion total addressable market in the U.S. Our lead drug candidate, PA101, is a previously approved drug that we repurposed for inhalation using our proprietary aerosol device. Based on promising Phase 2a results, we are now initiating a Phase 2b clinical trial to identify the optimal dose for Phase 3 studies – a very significant value creation point in pharmaceutical development (i.e. $500M - $1B).
How serious of a condition is chronic cough?
It can be debilitating for patients with a progressive and often terminal disease. About 75% of patients with pulmonary fibrosis and lung cancer suffer from a dry non-productive chronic cough with a frequency of up to 100 coughs or more per hour on average. This condition is refractory to currently available therapies, causes laryngeal and chest pain, headaches, vomiting, dizziness, incontinence and other symptoms, making it difficult to perform normal daily activities. And because people treat those with a chronic cough like lepers due to fears of catching a communicable disease, these patients also suffer from psycho-social complications such as anxiety, depression, and fear due to their isolation. Chronic cough can destroy quality of life.
Who are your competitors?
We are the first to demonstrate a therapy to be potentially effective and well-tolerated for treating chronic cough in pulmonary fibrosis patients, and to our knowledge there are no other clinical-stage programs in development for this indication. Our closest “competitor” is a drug candidate acquired by Merck last year for $500 million upfront and $750 million in milestones based on Phase 2 results for treating chronic cough in people with no underlying respiratory disease…importantly, this drug candidate was not effective in a Phase 2 trial for treating chronic cough in pulmonary fibrosis patients. Historically, opioids have been commonly prescribed to reduce cough, but given the nationwide epidemic of opioid abuse and related deaths, this option is becoming less available to patients.
What is the financing strategy?
We previously raised a $32 million Series A from a syndicate that included investors in my previous companies, life science CEOs, and family offices that funded drug and device optimization activities, preclinical toxicology studies, Phase 1 safety and pharmacokinetic studies, and a Phase 2 proof-of-concept clinical trial for treating chronic cough. We have demonstrated that our lead candidate is safe, well-tolerated, and efficacious for treating chronic cough in pulmonary fibrosis patients ($500-$800 million forecasted peak U.S. revenue). We have clear and supportive guidance from the FDA, robust IP and regulatory protection, and a team with proven execution skills.
We are now raising a $30 million Series B to complete a Phase 2b clinical trial and position PA101 for Phase 3 studies (all within the next two years), which historically enables M&A or an IPO at an attractive valuation.
Bill Gerhart has more than 25 years of experience starting, financing, and building companies based on promising technologies. Prior to founding Patara, he was the President & CEO of Elevation Pharmaceuticals, a San Diego-based biotech he founded to develop new aerosol therapies for underserved patient populations with respiratory diseases. At Elevation, Mr. Gerhart and his team developed a new inhaled treatment for patients suffering from chronic obstructive pulmonary disease (COPD), conducted multiple Phase 2 trials targeting older and sicker COPD patients, and then sold the Company to a subsidiary of Dainippon Sumitomo Pharma (Sunovion Pharmaceuticals). In 2016, Sunovion announced positive Phase 3 results for this new therapy (SUN-101) and the filing of an NDA. Mr. Gerhart was the President and CEO of Mpex Pharmaceuticals from 2002 to 2007, a company he founded to discover and develop new antibacterials for the treatment of serious infections including Aeroquin (Quinsair EU), an inhaled antibiotic now launched in Europe and Canada for the treatment of cystic fibrosis. Mr. Gerhart is a member of the Board of Trustees at the Sanford Burnham Medical Research Institute and a member of YPO. He earned an MBA degree at Harvard University and a BBA degree at Baylor University.
For more information, please reach out to Bill directly at firstname.lastname@example.org.