Ron Renaud's Kailera secures $400M for Phase 3 obesity biotech

Significant financial investments are being directed towards accelerating the development of treatments for obesity, with new contenders entering the market. Kailera Therapeutics is one such company, having recently secured $400 million in funding from Bain Capital Life Sciences, Atlas Venture, RTW, and Lyra Capital. This move follows Metsera's launch in April with $290 million in backing and a robust development pipeline.

CEO Ron Renaud emphasizes that Kailera is not a typical startup. With his extensive background leading successful biotech companies in the fields of hepatitis C, mRNA, and neuroscience, Renaud asserts that Kailera is equipped with an advanced and clinically validated portfolio of therapies targeting obesity and related disorders.

Kailera has obtained exclusive rights to four experimental drugs from Jiangsu Hengrui Pharmaceuticals, targeting obesity and related conditions. Leveraging Hengrui's existing work in China, Kailera plans to initiate a global Phase 3 study for these treatments, including a GLP-1/GIP dual agonist previously known as HRS9531, now rebranded as KAI-9531.

Renaud aims to expedite the global Phase 3 trial but has not disclosed specific timelines. The company must consult with international regulators to finalize the trial design, potentially including comparisons with Novo Nordisk’s semaglutide and Eli Lilly’s tirzepatide.

The obesity market is increasingly competitive, with numerous pharmaceutical companies and smaller biotech firms vying for entry through GLP-1-based treatments or other innovative mechanisms. Established players like Novo Nordisk and Eli Lilly present a significant challenge for newcomers like Kailera and Metsera. Metsera, for instance, recently released Phase 1 data for a long-acting GLP-1 injectable and plans to advance to Phase 2b by the end of this year, with aspirations to enter Phase 3 by late 2025.

Despite the competition, both Metsera and Kailera remain optimistic about their prospects in what they describe as a vast and underserved market. Renaud, drawing on his experience leading Cerevel through a similar landscape, believes there is still ample opportunity for new entrants.

In addition to its injectable GLP-1, Kailera’s portfolio includes an oral GLP-1 receptor agonist, a GLP-1/GIP/glucagon tri-agonist (referred to as a triple-G), and an oral version of its lead injectable. Hengrui is set to begin a healthy volunteer study for the triple-G in early 2025, and Kailera expects to start its own trials around the same time.

As Kailera prepares for Phase 3 trials and potential commercialization, it is weighing various manufacturing strategies, including working with external contract manufacturers and possibly acquiring or building its own facilities. This approach mirrors the substantial investments made by Novo and Lilly to meet the demand for their obesity treatments, Wegovy and Zepbound.

While Kailera has secured $400 million in funding, Renaud acknowledges that developing obesity treatments is a costly venture. The company has already paid $110 million to Hengrui for the drug rights. Whether Kailera will pursue an IPO as its next financing step is still undecided.

Kailera plans to expand its team from 25 employees to potentially double or triple that number by the second quarter of next year. The executive team includes experienced professionals such as Chief Medical Officer Scott Wasserman, Technical Chief Doug Bakan, Operating and Business Chief Paul Burgess, and Chief People Officer Paula Cloghessy. The company's board is chaired by former Gilead CEO John Milligan.