Developing diabetes drugs is no easy task. It's even harder if a start-up has to convince venture capitalists it can clear the FDA's high diabetes hurdles. And it's harder still if the FDA has just rejected a drug with the same mechanism of action.

That's the situation BHV Pharma Inc. finds itself in, but the Research Triangle Park, N.C.-based newco remains confident the FDA's recent rejection of AstraZeneca plc's and Bristol-Myers Squibb Co.'s SGLT2 inhibitor dapagliflozin isn't an indictment of the class, and that its own SGLT2 inhibitor, BHV091009, is a differentiated and valuable asset.

The foundation for BHV091009 was laid at Tokyo-based Kissei Pharmaceutical Co. Ltd. The program was licensed to GlaxoSmithKline plc in 2002, and the big pharma conducted about two dozen trials.

But in 2007, the diabetes landscape shifted dramatically, and GSK found itself sitting on the fault line. A meta-analysis published in the New England Journal of Medicine showed patients taking GSK's diabetes drug Avandia (rosiglitazone) had a 43 percent greater risk of myocardial infarction than those taking other treatments for diabetes or a placebo. Lawmakers and consumer groups pounced on the FDA, which in 2008 released new guidelines for all Type II diabetes drugs, demanding that cardiovascular-outcome studies be added to Phase II and III programs. (See BioWorld Today, July 3, 2008.)

The new requirements added hundreds of millions of dollars to the cost of bringing a diabetes drug to market. Adding that cost to the already high cost of detailing a primary care product made it harder to recoup an investment in a diabetes drug, and being first to market became critical, as evidenced by the fact that Merck and Co. Inc.'s DPP-4 inhibitor, Januvia (sitagliptin) became a blockbuster while Bristol-Myers Squibb Co.'s Onglyza (saxagliptin), the second DPP-4 inhibitor to market, struggled.

Avandia would later be yanked off the market in Europe and restricted in the U.S., but even before that, GSK worried that the SGLT2 inhibitor they had licensed from Kissei might be hard to differentiate from competitors that were more advanced. In 2009, they gave the product back.

But two GSK business development executives, William Wilkison and James Green, thought GSK was making a mistake.

"We took a step back and looked" at the 25 clinical trials GSK had conducted, and "we saw a simple yet elegant way to differentiate" the product, Green said.

The two left GSK in 2009 and founded BHV Pharma. They licensed the SGLT2 inhibitor program from Kissei and reformulated the molecule, creating BHV091009.

SGLT2 inhibitors work by preventing reabsorption of glucose into the bloodstream, instead forcing it to be excreted in the urine. Despite the FDA's recent complete response letter for dapagliflozin, the most advanced SGLT2 inhibitor in development, Green and Wilkison remain confident that the drugs as a class will succeed. And they are not alone: SGLT inhibitors are in development at Johnson & Johnson, Pfizer Inc., Boehringer Ingelheim GmbH (in a partnership with Eli Lilly and Co.), Lexicon Pharmaceuticals Inc. and Sirona Biochem Corp.

Wilkison explained that while most SGLT2 inhibitors are c-linked glycosides, BHV091009 is o-linked, which means it has a shorter half-life and is less likely to hang around in the body, creating side effects. BHV's reformulation also optimized SGLT2 inhibition during the day and reduced the drug's activity at night. Wilkison said that means BHV091009 will be in high gear after meals, when it is most needed, but its disappearance at night will almost be like giving patients a drug holiday and should reduce side effects.

"We believe we have the only positively differentiated SGLT2 inhibitor," Green said. He added that much of the data gathered at GSK was never published, but it makes BHV "very confident in the molecule."

GSK already completed two Phase IIb trials. Next up for BHV is a Phase IIb trial with the reformulated compound, after which time the start-up hopes to have an optimal dose and be Phase III-ready.

At that point, BHV is likely to see a partner. Considering the regulatory issues around diabetes drug development and the scale of the studies now required, "we don't think it makes sense for a company of our size," Green said.

Yet Green said he is "quite confident" larger partners will have an appetite for a differentiated SGLT2 inhibitor. He noted that BHV was specifically formed around a single asset to make a future acquisition easier, with no extra complications of valuing multiple assets or figuring out tax write-offs for assets not pursued.

Thus far, BHV has been funded by private individuals and some grant money. Green said the firm recently started a fundraising process, but he declined to provide details.