Intarcia Therapeutics Secures Landmark $210-Million Financing

Intarcia Therapeutics, Inc. recently announced the simultaneous completion of two financings with total proceeds of $210 million, the largest sum to be raised by a private biotechnology company in at least 25 years. The financings consisted of $160 million in proceeds from a preferred stock private placement and $50 million in proceeds from a private debt placement.

Investors in these financings included existing investors New Enterprise Associates, Inc., New Leaf Venture Partners, and Venrock, as well as new investors, The Baupost Group, LLC, Farallon Capital Management, LLC, and three additional top-tier institutional investors based in Boston and New York.

As a result of these transactions, Intarcia has retained full strategic and financial control of its lead product candidate ITCA 650 (continuous subcutaneous delivery of exenatide), which, if approved, would be the first and only once-yearly, injection-free GLP-1 therapy for the treatment of type 2 diabetes. Intarcia intends to initiate the global Phase III program for ITCA 650 in the first quarter of 2013 with its strategic partner Quintiles, Inc., the world’s leading biopharmaceutical service provider, which has helped develop or commercialize 18 of the 20 best-selling diabetes products.

“With this landmark financing in place, we have fully preserved the vision for our company, and our aim to bring potentially revolutionary clinical, economic, and humanistic benefits to millions of diabetes patients around the world,” said Kurt Graves, Chairman, President, and Chief Executive Officer of Intarcia. “After considering multiple options to maximize shareholder value and scaling up for our ITCA 650 Phase III program, we chose to align with this elite group of investors who not only shares our vision for ITCA 650 in the diabetes marketplace, but has also expressed its confidence in our ability to shepherd ITCA 650 successfully through clinical trial development and to strike the collaborations needed to make ITCA 650 a global market success.”

Robert R. Henry, MD, Professor of Medicine at the University of California, San Diego, Chief, Section of Diabetes, Endocrinology and Metabolism at the VA San Diego Healthcare System, and immediate Past President of the American Diabetes Association, added, “I am excited about this progress for ITCA 650, as it facilitates the launch of a global Phase III program and advances this innovative therapy toward the many patients I believe may benefit from improved efficacy, tolerability, and the ensured compliance and long-term control that could come from a once-yearly therapy. The trials could demonstrate a real treatment breakthrough for patients and, given the global scale of unmet needs in type 2 diabetes, I believe the entire community should be enthusiastic about research like this and potential products like ITCA 650.”

The completed financing will also facilitate the previously announced move of Intarcia’s corporate headquarters to the Boston, MA, area, while keeping its early development capabilities and state-of-the-art manufacturing site at its current location in Hayward, CA.

Morgan Stanley acted as sole structuring advisor to Intarcia for the transaction. In addition, Morgan Stanley acted as sole placement agent for the debt and lead placement agent for the equity. Leerink Swann LLC acted as co-placement agent on the equity.

ITCA 650 (continuous subcutaneous delivery of exenatide) is being developed for the treatment of type 2 diabetes. The investigational therapy employs Intarcia’s proprietary technology platform involving a matchstick-size, miniature osmotic pump that is inserted subcutaneously to provide continuous and consistent drug therapy, and the company’s proprietary formulation technology, which maintains stability of therapeutic proteins and peptides at human body temperatures for long extended periods of time.

Data from Intarcia’s ITCA 650 Phase II program have demonstrated significant and sustained reductions in HbA1c and body weight over 48 weeks of treatment with a marked reduction in the GI adverse events typically associated with the self-injection products in this class. ITCA 650 is an investigational new therapy and is not currently approved by any regulatory authority. Exenatide, the active agent in ITCA 650, is a glucagon-like peptide-1 (GLP-1) receptor agonist currently marketed globally as a twice-daily self-injection therapy for type 2 diabetes. Upon approval, ITCA 650 would represent the first injection-free GLP-1 therapy that can deliver a full year of treatment from a single placement. Intarcia’s robust intellectual property portfolio protects ITCA 650 through 2031.

Intarcia Therapeutics, Inc. is a biopharmaceutical company developing therapies to enhance treatment outcomes by optimizing and improving the efficacy, continuous administration, and tolerability of drug therapies. In addition, delivering medicines just once or twice yearly virtually ensures patient adherence and compliance, which is very poor in most chronic diseases. Intarcia’s drug development expertise and competitive edge are demonstrated by its abilities to stabilize proteins and peptides at above-body temperature and to deliver them in a constant and consistent manner via Intarcia’s proprietary technology platform. Intarcia is pursuing a Phase III-stage development program for type 2 diabetes and has additional programs ongoing for weight regulation to control obesity. In addition to those listed above, investors in Intarcia include Alta Partners, Foresite Capital, and Omega Funds. For more information, visit www.intarcia.com.