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SALE OF BALANCE THERAPEUTICS, INC.

Gerbsman Partners (www.gerbsmanpartners.com) has been retained by Balance Therapeutics, Inc. to solicit interest for the acquisition of all, or substantially all, the assets of Balance Therapeutics, Inc. (please see detail sales letter attached with additional Balance Therapeutics technology information).

Balance Therapeutics Inc. (“Balance”) is a privately held clinical-stage biopharmaceutical company located in Burlingame, CA, USA primarily focused on developing therapies for individuals with rare sleep disorders and other disorders associated with cognition and sleep. Our lead product candidate, BTD-001 (pentylenetetrzole or PTZ), is in Phase 2 clinical trials for the treatment of two rare and debilitating forms of primary hypersomnia: Idiopathic Hypersomnia (IH), and Narcolepsy Type 2 (Na-2).  As of August, 2020, Balance has 29 patents and 7 patents pending.

BTD-001 is an oral formulation of PTZ, a GABAa receptor antagonist that can reduce excessive GABA function in the central nervous system (CNS) in patients with IH or Na-2.

We believe that BTD-001 also has therapeutic potential in other rare sleep disorders beyond the two lead indications and in diseases where there is a neurocognitive impairment (mental fog) associated with an increased GABA function signal such as autism spectrum disorders, attention deficit disorder, Parkinson’s, and Schizophrenia among others.

The acquisition of Balance enables immediate access to a Phase 2 candidate with extensive clinical experience. To date, Balance has raised 3 rounds of private financing totaling $60M  supported by a premier team of life science investors including Mohr Davidow Ventures, Pappas Capital, OrbiMed, and Oakmont Corp. Balance also has an NOL of approximately $30 million for interested parties.

IMPORTANT LEGAL NOTICE:

The information in this memorandum does not constitute the whole or any part of an offer or a contract. 

The information contained in this memorandum relating to Balance’s Assets has been supplied by Balance.  It has not been independently investigated or verified by Gerbsman Partners or its agents.Potential purchasers should not rely on any information contained in this memorandum or provided by Balance, or Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact. Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.

Balance, Gerbsman Partners, and their respective staff, agents, and attorneys, (i) disclaim any and all implied warranties concerning the truth, accuracy, and completeness of any information provided in connection herewith and (ii) do not accept liability for the information, including that contained in this memorandum, whether that liability arises by reasons of Balance’s or Gerbsman Partners’ negligence or otherwise.  

Any sale of the Balance Assets will be made on an “as-is,” “where-is,” and “with all faults” basis, without any warranties, representations, or guarantees, either express or implied, of any kind, nature, or type whatsoever from, or on behalf of Balance or Gerbsman Partners.  Without limiting the generality of the foregoing, Balance and Gerbsman Partners and their respective staff, agents, and attorneys, hereby expressly disclaim any and all implied warranties concerning the condition of the Balance Assets and any portions thereof, including, but not limited to, environmental conditions, compliance with any government regulations or requirements, the implied warranties of habitability, merchantability, or fitness for a particular purpose.

This memorandum contains confidential information and is not to be supplied to any person without Gerbsman Partners’ prior consent.  This memorandum and the information contained herein are subject to the non-disclosure agreement attached hereto as Exhibit A.

 

COMPANY

Balance Therapeutics Inc. (Balance) is a privately held clinical-stage biopharmaceutical company located in Burlingame, CA primarily focused on developing therapies for individuals with rare sleep disorders and other disorders associated with cognition and sleep. Our lead product candidate, BTD-001 (pentylenetetrzole or PTZ), is in Phase 2 clinical trials for the treatment of two rare and debilitating forms of primary hypersomnia: Idiopathic Hypersomnia (IH), and Narcolepsy Type 2 (Na-2).

BTD-001 is an oral formulation of PTZ, a GABAa receptor antagonist that can reduce excessive GABA function in the central nervous system (CNS) in patients with IH or Na-2. We believe that BTD-001 also has therapeutic potential in other rare sleep disorders beyond the two lead indications.

The acquisition of Balance enables immediate access to a Phase 2 candidate with extensive clinical experience. To date, Balance has raised 3 rounds of private financing totaling $60M  supported by a premier team of life science investors including Mohr Davidow Ventures, Pappas Capital, OrbiMed, and Oakmont Corp.

Balance Therapeutics has a patent portfolio that consists of 5 patent families including 3 in-licensed families, consisting of 29 patents and 17 pending patent applications.  The portfolio protects methods of use such as treating hypersomnia, treating excess daytime sleepiness, which may be associated with myotonic dystrophy, and improving cognitive function, as well as protecting next generation pentylenetetrazol compounds

Balance has no recurring revenues, product or collaboration related. Its value lies with the clinical asset BTD-001, clinic trial results, FDA interactions, an extensive preclinical package, its intellectual property as well as that for the second generation PTZ molecules.

Historical Company Information

Balance was founded in 2009. Following the completion of a robust Phase 1 program (3 clinical studies) in 2012, the Company began a clinical program to address neurocognitive deterioration in patients with Down’s syndrome. A Phase 1b trial in approximately 90 adolescents and young adults with Down’s syndrome was completed. In 2015 the Company decided to focus clinical development in the area of intrinsic sleep disorders. A pilot study and two phase 2 trials were completed in patients with idiopathic hypersomnia and patients with narcolepsy type 2. PTZ has been available in IV and oral formulations in the United States and other countries for several decades. PTZ was approved in the USA and several European countries for use in multiple neuropsychiatric indications. The IV route was used primarily to treat barbiturate overdoses, to speed awakening after anesthesia or, at very high doses, to provoke “therapeutic seizures” in psychiatric illnesses. The oral form was used at lower dose levels, often in combination with vitamins or iron, to treat a variety of chronic conditions, such as senile confusion, depression, fatigue, and vertigo.  In 1982, marketing authorization for drug products containing PTZ was withdrawn by the FDA due to insufficient formal evidence for efficacy.  There were no safety concerns leading to the marketing authorization withdrawal.

Thus far, Balance has completed 7 clinical studies with BTD-001: Three studies in healthy volunteers,  1 study in patients with Down Syndrome (Study DS-102) and 3 studies in patients with primary hypersomnia (Study IH101, Study IH201) and 1 study specifically in idiopathic hypersomnia (Study IH202).

Since 2014, Balance has had several FDA interactions to discuss CMC, nonclinical and clinical plans regarding the development of BTD-001. Through these interactions Balance has been able to establish a regulatory path forward for BTD-001 with a differentiated target product profile in the field of hypersomnia.

Why is our asset valuable?

BTD-001 Targets mental fog and other significant daytime symptoms in patients with Idiopathic Hypersomnia (IH)

  1.  IH is an incurable chronic neurological disorder characterized by debilitating, pervasive daytime sleepiness and other daytime symptoms including mental fog (“brain fog”), difficulty remembering things, difficulty concentrating or focusing and difficulty having conversations with others. Symptoms occur despite adequate or extraordinary sleep amounts. The prevalence of the disease is estimated at approximately 25,000 patients in the United States. There are currently no approved drugs to treat IH. Although CNS stimulants have been prescribed off-label, they generally provide insufficient symptomatic relief, leaving patients in a state of artificial wakefulness that does not address other daytime symptoms or the underlying etiology in IH.
  2. Based on studies completed to date, we believe BTD-001 has great potential to transform the lives of patients with IH.  BTD-001 has a favorable safety profile and has shown initial proof of concept and efficacy signals in a sub-groups of IH patients with long sleep in randomized placebo-controlled studies. We believe that BTD-001 is the only drug candidate currently in development targeting treatment of the most bothersome daily symptoms of mental fog in addition to treating sleepiness.  Balance has developed a proprietary Patient Report Outcome (PRO) instrument to measure the improvement of daytime symptoms.  In a Type C meeting, the FDA has agreed that the endpoint captured by the Balance-developed PRO can be used as the basis for a marketing approval.
  3. PTZ has a long history of clinical use.   Experience from over 4300 patients has been described in a broad medical literature spanning several decades.  As of to-date, over 220 subjects have been dosed with BTD-001 in studies conducted by Balance Therapeutics without any significant safety events.
  4. BTD-001 has received orphan drug designation for the treatment of IH by the FDA, and the European Medicines Agency (EMA).
  5. BTD-001 has an established regulatory path forward with a differentiated target product profile in the field of hypersomnia.

We believe IH presents a very attractive opportunity.  In addition, BTD-001 may show benefit in other GABA-driven neurological diseases with similar bothersome daily symptoms.

Balance’s Assets

  • Extensive IP and Orphan Exclusivity (US and EU) on the use of PTZ in treatment of hypersomnia.
  • Extensive knowledge in the treatment of Idiopathic hypersomnia.
  • A proprietary Patient Report Outcome tool that captures the most important daytime symptoms in IH and differentiates BTD-001 from other current off-label treatments used in IH.
  • Potential commercial opportunity in IH can be up to $400M annually worldwide
  • Extensive nonclinical studies characterizing the safety, pharmacology, PK and metabolism, mutagenicity and chronic and reproductive toxicology.
  • Approximately 7 kg of Active Pharmaceutical Ingredient (Pentetrazole) and sufficient quantity of drug capsules to supply a new Phase 2 study.
  • Completed extensive Drug Product development for late phase and commercial use.  Prototype drug tablets made.

The assets of Balance will be sold in whole or in part (collectively, the “Balance Assets”). The sale of these assets is being conducted with the cooperation of Balance.  Balance and its consultants will be available to assist purchasers with due diligence and a prompt, efficient transition to new ownership.

Balance Patents

Balance Therapeutics has a patent portfolio that consists of 5 patent families including 3 in-licensed families, consisting of 29 patents and 17 pending patent applications.  The portfolio protects methods of use such as treating hypersomnia, treating excess daytime sleepiness, which may be associated with myotonic dystrophy, and improving cognitive function, as well as protecting next generation pentylenetetrazol compounds.

Please see detailed Patent information attached to this sales letter email.

Balance Therapeutics, Inc. Key Personnel

  • Morgan Lam President: Morgan serves as President and is responsible for leading daily operations and product development of BTD-001. Previously, he was the Chief Operating Officer and Senior Vice President of Development for Humanigen Inc. (formerly KaloBios Pharmaceuticals, Inc.) from January 2016 to 2018 where he was responsible for the development of lenzilumab and ifabotuzumab for various oncology and non-oncology indications. Prior to that, he served as Executive Director for Medical & Scientific Affairs for Geron Corp. as well as Head of Clinical Operations Department from 2010 to 2015 where he played a key role in the development of imetelstat. Prior to that, Morgan spent six years at Genentech Inc. (now Hoffman LaRoche) as Clinical Program Manager in leading the clinical operations efforts for numerous oncology drug candidates including Gazyva® and Venclexta™ for the treatment for various solid and liquid tumors. Before Genentech, he worked with increasing responsibilities for over six years in the Clinical Development organizations for INEX and QLT Inc. Morgan received his bachelor’s degree in Microbiology and Biochemistry from the University of British Columbia and currently participates in various executive leadership and entrepreneurship programs.
  • Alejandro Dorenbaum, M.D. CMO:  Alejandro (Alex) serves as Head of Clinical Development. Previously, he was Chief Medical Officer at Allakos Pharmaceutical where he achieved proof-of-concept in clinical trials for novel therapeutic antibodies targeting inflammatory cells. He served as Chief Medical Officer at Lumena Pharmaceutical until it’s acquisition by Shire. Prior to that, Alex joined Genentech, where he was responsible for the respiratory programs for asthma and cystic fibrosis, BioMarin Pharmaceutical, Inc. where he conducted the clinical development of Kuvan® and Chiron Corporation where he acquired broad expertise in several areas of drug development including biologics, small molecules, and vaccines. Alex consults for several early development companies and he maintains an active academic position as Clinical Professor of Pediatrics at Stanford University School of Medicine, where he treats patients with Allergy and Immunology clinical problems.
  • Lyndon Lien, Ph.D. – Co-founder & Advisor:  Lyndon serves as Advisor and member of the Board of Directors for Balance Therapeutics. Previously he was President, Chief Executive Officer and Co-founder of Balance Therapeutics and provided overall leadership for the company for over 8 years. Lyndon is Co-founder, President and CEO of Qinotto, a biotech company developing CNS therapeutics based on technologies licensed from Stanford University.  Lyndon was also Global VP of Corporate Strategy and Alliances at Elan Pharmaceuticals responsible for strategic planning, product planning and business development. He held leadership positions at Johnson & Johnson in product development and at McKinsey & Company as a management consultant.  He has venture capital experience with Pivotal bioVenture Partners and Coastview Capital.

Lyndon has an A.B. in Biochemical Sciences from Harvard College, an M.B.A. from MIT Sloan School of Management and a Ph.D. in Genetics from Harvard University.

Balance Therapeutics, Inc. Board of Directors

  • Phyllis Whiteley, Ph.D. – Executive Board Chair: Phyllis is a Venture Partner with Wildcat Venture Partners.
  • Carl Gordon, PhD: Carl L. Gordon, Ph.D., CFA, has served as a member of our board of directors since February 2016. Dr. Gordon is a founding member, Managing Partner, and Co-Head of Global Private Equity at OrbiMed Advisors LLC, an investment firm.
  • Peter Carlton, CFA: Peter is Managing Director at Oakmont Corporation, a registered investment advisor formed in 1984 to serve as the family office for the founder of Trust Company of the West and now overseeing approximately $2.5B in assets for high networth clients and investors.
  • Kyle Rasbach: Kyle is a Partners at Pappas Capital.

The Bidding Process for Interested Buyers

Interested and qualified parties will be expected to sign a nondisclosure agreement (attached hereto as Exhibit A) to have access to key members of the management and intellectual capital teams and the due diligence “war room” documentation (the “Due Diligence Access”).  Each interested party, as a consequence of the Due Diligence Access granted to it, shall be deemed to acknowledge and represent (i) that it is bound by the bidding procedures described herein; (ii) that it has an opportunity to inspect and examine the Balance Assets and to review all pertinent documents and information with respect thereto; (iii) that it is not relying upon any written or oral statements, representations, or warranties of Balance Therapeutics, Inc., Gerbsman Partners, or their respective staff, agents, or attorneys; and (iv) all such documents and reports have been provided solely for the convenience of the interested party, and neither Balance nor Gerbsman Partners (or their respective, staff, agents, or attorneys) makes any representations as to the accuracy or completeness of the same. 

Following an initial round of due diligence, interested parties will be invited to participate with a sealed bid, for the acquisition of the Balance Assets.  Sealed bids must be submitted so that the bid is actually received by Gerbsman Partners no later than September 18th, 2020 at 3:00 p.m. Pacific Time (the “Bid Deadline”) at Balance’s office, located at 863A Mitten Road Ste. 100B2, Burlingame, California 94010.  Please also email steve@gerbsmanpartners.com with any bid.

Bids should identify those assets being tendered for in a specific and identifiable way.  The attached Balance fixed asset list may not be completed and Bidders interested in the Balance’s Assets must submit a separate bid for such assets.  Be specific as to the assets desired.

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase where applicable.  All bids must be accompanied by a refundable deposit check in the amount of $200,000 (payable to Balance Therapeutics, Inc.).  The winning bidder will be notified within 3 business days after the Bid Deadline.  Non-successful bidders will have their deposit returned to them.

Balance reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all assets from sale.  Interested parties should understand that it is expected that the highest bid will be chosen as the winning bidder and bidders may not have the opportunity to improve their bids after submission.

Balance will require the successful bidder to close within 7 business days.  Any or all of the assets of Balance will be sold on an “as is, where is” basis, with no representation or warranties whatsoever. 

All sales, transfer, and recording taxes, stamp taxes, or similar taxes, if any, relating to the sale of the Balance Assets shall be the sole responsibility of the successful bidder and shall be paid to Balance at the closing of each transaction. 

For additional information, please see below and/or contact:

Steven R. Gerbsman                                                                                                                               

steve@gerbsmanpartners.com                                 

Kenneth Hardesty

ken@gerbsmanpartners.com

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Subject: Some perspective om the Covid19 situation.

Imagine that you are born in 1900

When you’re 14, World War I begins and ends when you’re 18 with 22 million dead.

Soon after a global pandemic, the Spanish Flu, appears, killing 50 million people. And you’re alive and 20 years old.

When you’re 29 you survive the global economic crisis that started with the collapse of the New York Stock Exchange, causing inflation, unemployment and famine.

When you’re 33 years old the Nazis come to power.

When you’re 39, World War II begins and ends when you’re 45 years old with a 60 million dead, and, in the Holocaust, 6 million Jews die.

When you’re 52, the Korean War begins.
When you’re 64, the Vietnam War begins and ends when you’re 75.

A child born in 1985 thinks his grandparents have no idea how difficult life is, but they have survived several wars and catastrophes.

Today we have all the comforts in a new world, amid a new pandemic.  But we complain because we need to wear masks.  We complain because we must stay confined to our homes where we have food, electricity, running water, wi-fi, even Netflix!  None of that existed back in the day.  But humanity survived those circumstances and never lost their joy of living.

A small change in our perspective can generate miracles.  We should be thankful that we are alive.  We should do everything we need to do to protect and help each other.

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Hard to believe that it’s been almost 20 years, but please enjoy this refreshing reminder of the “unification” we all experienced after 9/11. 
 
Most people are not aware that a Secret Service special agent, dressed as an umpire the night President Bush threw out the pitch during the 2001 World Series at Yankee Stadium. Great story!! I’m surprised that none of the newspaper guys ever picked up on the “stranger” in the umpire’s uniform. 
Remember this was just after 9/11.  This is our country in one of its many best moments… 
If you don’t do anything else today, just watch this!
It’s great and it’ll make you proud all over again – to be an American!!!
 
http://www.youtube.com/embed/bxR1tZ08FcI?rel=0

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Please see link below of a video conversation that I had with Michael Matias of “20 Minute Leaders”.  This is a very focused discussion on “maximizing enterprise value” and I would recommend for senior lenders, venture capital and their portfolio companies.   https://www.youtube.com/watch?v=M86oYMFQbgo

“20 Minute Leaders” is daily show hosted by Michael Matias (Stanford University, former 8200 cybersecurity unit) in conjunction with J-Ventures. The series has over 200 episodes and releases episodes daily, featuring thought leaders from around the world across a variety of industries. If you want to be on the show, or know someone relevant, Michael is looking for more thought leaders. Link to the show: https://www.facebook.com/20minuteleaders/.

Feel free to reach out to me to get introduced to Michael Matias to schedule a video session.

Please visit Gerbsman Partners

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State Of Healthcare Q2’20 Report: Sector And Investment Trends To Watch

 

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