Versant and Novartis build ‘Chinook 2.0’ for RNA therapies in kidney diseases

Five years to the day after launching Chinook Therapeutics, Versant Ventures is back with a second generation of that kidney disease biotech and has a partner in Chinook’s acquirer, Novartis.

The biotech incubator and investor broke the cover on Vancouver startup Borealis Biosciences on Thursday morning. Borealis begins with 25 people from Chinook, a late-stage drug developer that Novartis bought for $3.2 billion upfront last year.

Except this time, instead of working on small molecules and biologics, Borealis’ mandate is taking RNA medicines into the kidney. It will likely face some uphill battles: Delivering RNA therapeutics is tricky and the biology of the kidney is hard to sift through.

Borealis has $150 million to start, inclusive of a Series A from Versant and Novartis, and research collaboration money from the Swiss pharma giant. The move comes as Novartis is building a kidney drug portfolio. It landed its first renal drug approval earlier this month.

Novartis has the option to buy two of Borealis’ pipeline programs before they reach the clinic, and that could lead to up to $750 million in payouts for the startup. It’s a familiar model for Versant: The venture firm revealed a new obesity biotech earlier this summer, and the company came out of the gates with AstraZeneca bagging an option to buy it.

“A first of its kind for Novartis, this three-part transaction of divestment, collaboration and investment is a testament to our company’s unwavering focus on advancing renal science,” Novartis chief strategy and growth officer Ronny Gal said in a statement. Novartis divested the legacy Chinook site in Vancouver as part of the deal.

‘Chinook 2.0’

When Versant launched Chinook half a decade ago, there hadn’t been a new kidney disease drug approval in about 20 years, as Borealis chair and Versant managing director Jerel Davis pointed out in an interview. At the time, Versant said “the time is now for new approaches to kidney diseases.” Eight new drugs have been approved since then, Davis said.

“We were right. It was remarkable how much came forward since 2018 in this space,” Davis said.

Davis said researchers at Chinook hit a dead end with some of the targets it “most wanted to pursue” because small molecule and biologic approaches wouldn’t work in their favor. That led Versant and Novartis to come up with the idea for a new venture centered on RNA therapeutics.

RNA therapies are one of the five R&D approaches in Novartis’ “toolkit.” The large pharma landed a key siRNA approval in 2021 for Leqvio and has inked deals in the space, including the $500 million upfront acquisition of DTx Pharma last July.

There are now a little more than 20 RNA-based medicines approved by the FDA, and dozens of experimental treatments are coming behind those in the clinic.

But development is lacking in two areas, Davis said: delivery and the complex biology of the kidney.

“One is the level of delivery and potency of the RNA impact in the cell,” he said. “We’re not that far off, based on the programs that have gone in the clinic and preclinical data. We’re on the cusp of making this happen in relevant targets and relevant cells.”

Asked if lipid nanoparticles, or LNPs, could be a delivery method that Borealis employs, Davis said the new company will “take advantage of novel approaches to delivery, as you alluded to.”

On the complex biology front, Davis said researchers essentially need a “Google Maps of the kidney.”

“If you think about a 40-cell system, you have to have a pretty deep understanding of patient pathology, underlying cellular dysfunction and the genes and the isoforms of those genes that you actually want to target in those cells to impact that pathology,” Davis said. “That requires a really expert team. When others have tried to approach this field in the past, they’ve done it through an RNA lens. They’re a hammer looking for a nail.”

The nascent company is keeping quiet on the specifics of its delivery plans, targets and pipeline projects for now. But Davis confirmed one area that will not be a focus: immunoglobulin A nephropathy, or IgAN. Chinook has two late-stage assets for the rare autoimmune disease that impairs the kidneys. There have been multiple approvals and acquisitions in the field in recent quarters.

Both Chinook and Borealis take their names from types of winds. And Versant just so happened to choose the Borealis moniker the same week that many people in North America caught sight of the aurora borealis earlier this year, Davis said.

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