NeuroTherapeutics Pharma Gets $43M Series B for Epilepsy, Painhttp://insurancenewsnet.com/article.aspx?id=191976
Despite the difficult venture capital markets, NeuroTherapeutics Pharma Inc. (NTP) raised a whopping $43 million in Series B financing to advance its epilepsy and pain compounds into clinical trials.
The round ranks among the biggest biotech venture raises so far this year, and it is particularly impressive given that NTP is not yet in the clinic. Brian Williams, vice president of corporate development and finance for Chicago-based NTP, said his experience during the fundraising was that many venture investors are gravitating toward low-priced, later-stage assets, creating intense competition for scarce early stage funding.
Even so, NTP managed to attract new investors Fidelity Biosciences, MPM Capital, SR One (GlaxoSmithKline plc's venture arm) and Pfizer Inc. Existing investors Novo Ventures and Thomas McNerney & Partners, who put $5 million into the company's Series A round back in 2006, also participated. Williams said the syndicate provides "the best of both worlds," referring to the mix of traditional and corporate investors, yet he noted that NTP did not give up any future rights or options to its products.
What brought so many new investors on board? Williams credited a "completely unique" mechanism of action for treating central nervous system disorders that has produced encouraging preclinical safety and efficacy data, even outperforming blockbuster comparators like gabapentin (now generic, but originally Pfizer Inc.'s Neurontin).
NTP was formed in 2006 by a group of angel investors and academic researchers. The company secured its Series A financing and operated virtually until 2008, when the venture backers decided it was time to ramp up the management team. They hired Williams, President and CEO Stephen Collins, Vice President of Research and Development Stephen Wanaski, and Vice President of Operations Holli Carlson. All four hailed from Ovation Pharmaceuticals Inc., which marketed several CNS drugs and boasted two Phase III programs for epilepsy.
Ovation was later acquired for $900 million by H. Lundbeck AS, which subsequently gained approval of epilepsy drug Sabril (vigabatrin), an irreversible inhibitor of gamma-aminobutyric acid transaminase. (See BioWorld Today, Feb. 10, 2009, and Aug. 24, 2009.)
When the Ovation team came on board, NTP was focused on one novel CNS target. Yet Williams noted that as optimization increased efficacy, it was actually taking them further and further from their intended target. NTP was able to identify the new target and mechanism of action causing the efficacy and reposition its efforts.
The company is keeping the details of its approach confidential for now, but Williams said lead compound NTP-2014 is an oral, small molecule that works through a known system to decrease the excessive firing in the brain associated with a variety of CNS disorders. And while other drugs can decrease firing too much, resulting in sedation or even cognitive decline, NTP-2014 works in a localized portion of the brain, only during times of excessive neuronal discharge.
The initial indication for the drug is epilepsy, which Williams noted affects 1 percent of the population, with more new cases diagnosed each year than multiple sclerosis, cerebral palsy, muscular dystrophy and Parkinson's disease combined. Yet Williams said a "significant" number of patients are refractory or unresponsive to the available treatments, and even those who do respond are saddled with side effects. Lundbeck's Sabril, for example, has been linked to vision loss, and gabapentin can cause dizziness and sleepiness.
"Coming in with a completely novel mechanism offers them hope, because you're going about the problem in a different manner," Williams added.
NTP also is focusing on neuropathic and acute pain, as well as other CNS disorders.
The firm is aiming to file an investigational new drug application by the end of the year and get into the clinic early next year. With lean, virtual operations and no wet labs, the Series B funding is expected to carry NTP-2014 through Phase II trials in multiple indications as well as support the development of additional compounds.
In other financing news:
• MethylGene Inc., of Montreal, completed its previously announced C$9.1 million (US$8.9 million) nondilutive financing through which it conducted a court-supervised corporate reorganization, transferring all of its assets and liabilities to a newly incorporated firm with the same name. MethylGene's work on its cancer pipeline will continue as before.
• NeoStem Inc., of New York, has converted redeemable Series C preferred stock by RimAsia Capital Partners LP. That means the company will no longer be required to pay the annual dividend and expects to recognize cash savings of $408,875 per year.