Pherecydes seduced 2021 IPO gatekeepers for startups fighting infectious diseases. Here’s what we learned along the way.

Feb 9 · 7 min read

By Franck Lescure.

Pherecydes Pharma: At the forefront of the fight against antibioresistant bacteria

Pherecydes checks all the right boxes: bacterial treatment breakthrough and oversubscribed IPO.

If the COVID pandemic has taught us anything, it’s that we need to seriously invest in healthcare and biotech startups and challenge the current state of medical research investment at both a private and public level. Thankfully at Elaia, we were already one step ahead. Our newest listed company Pherecydes Pharma is addressing the growing medical need to treat antibiotics resistance of bacterial infections by reshaping a technology validated by one century of clinical usage, all while setting records on the stock exchange. The company recently announced the success of its IPO with a historical over subscription and a robust +60% of share price on the first day of quotation.

Nosocomial infections (hospital-acquired infections) represent 750,000 cases per year in France (7% of hospitalized patients), and more than 9,000 cases of deaths. In the US, it represents 2 million people (10% of hospitalized patients) and 88,000 deaths per year. More frightening, sustained worldwide use of antibiotics (A $ 40Bn market with a growth of +65% between 2000 and 2015, and a predicted +200% between 2015 and 2030) has fed the emergence of bacterial infections resistant to multiple antibiotic treatments (called “MDR infections”). More than 800,000 patients per year suffer from MDR infection in the US while there are more than 670,000 per year in Europe, increasing mortality by 2.4x and hospital journeys by 9 to 13 days on average, for an additional healthcare cost of $20k to $80k per patient. In 2014, we estimated that it represented 700,000 deaths worldwide. Multi-resistant bacterial infections are predicted to become the number one cause of death in 2050, with one death every three seconds (O’Neil report)! It’s high time that we challenge the way we invest and pave the way for life science startups dealing with infectious diseases. Here are some insights that we’ve gathered throughout our journey with Pherecydes:

Phages — a tale as old as time

Saving lives

To make a long and complicated story short, back in the 1920s, this side of the fight against infectious diseases started at the Paris Pasteur Institute when phage therapy was invented, based on the very simple idea of using natural predators to fight against bacterial infectious diseases. Bacteriophages, or phages, are natural killers of bacteria, and they became our best allies. One century later, the successful IPO of Pherecydes represents a cornerstone step towards a wide medical use of natural bacteriophages. The company targets three bacterial infections representing near to 70% of nosocomial MDR infections.

“With Pherecydes, we experienced very emotional results on the clinical side with some of the compassionate cases that the company has dealt with”, remembers Franck. “Among the early cases was an overweight woman whose hip prosthesis had been contaminated by both a Staphylococcus aureus and a Pseudomonas aeruginosa which were resisting all antibiotic treatment. In late 2017, she was treated with phages from Pherecydes with the desperate goal to survive until the next Spring. At present, the patient has not only survived, but she also walks.

France as a leading country

A question of quality

The Pherecydes story is also illustrative of this trend: to master biomanufacturing technologies has become a key strategic asset for modern biotechnologies.

In the 1970s, the emergence of biotherapeutic proteins was the first step towards development of living therapeutics, with leaders like Genentech, Amgen or Genzyme. These successful biotechs paved their success by using living organisms to produce complex biotherapeutic components, like enzymes or antibodies. Since then, bioproduction expertise and bioengineering have strengthened and a whole new sector has emerged, the white biotechnologies, regrouping any use of living systems as an alternative to classical chemistry. This evolution has brought innovative methods to prepare bacteriophages for a therapeutic use, with a level of quality compatible with regulatory constraints of industrialized countries. This patented technological ability motivated our initial investment in Pherecydes, because after one century of medical use, the challenge was no longer therapeutic efficacy or absence of toxicity, but to reach the necessary manufacturing quality to be allowed for clinical usage.

What does the future hold?

Surprisingly, companies like Pherecydes are facing an investor Death-Valley as early as at Series A stage, and many of these projects are not going through despite huge potential and a very supportive environment at seed stage. This gap between medical necessity and financial attractiveness may represent a concern for the coming years, especially when a proper campaign for the development of new therapeutics usually takes ten to twenty years. Pherecydes was the exception to this rule. The company succeeded in its IPO campaign after its Series B, instead of raising money in a predicted difficult Series C round. This begs the question, is this the pathway to success for infectiology startups? The antibiotic market is a declining market, where it is currently very difficult to ensure a healthy return and which has been deserted by the Big Pharmas, hence depriving small biotech from natural exits through licencing and/or M&A. A whole new wave on how to finance antibiotics is emerging and the market needs disruption, both in the business model and in the scientific approach as low-hanging fruits have already pruned. Whatever the financial case may be, startups like Pherecydes need to become the rule and no longer the exception.

It’s only just the beginning

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