Staff Writer

With the completion of a $40 million Series B financing, Hyperion Therapeutics Inc. has the resources to begin moving forward with the pipeline of marketed and clinical-stage urea cycle disorder treatments it licensed last month.

Sofinnova Ventures led the round, which also included Highland Capital Partners, New Enterprise Associates and WRF Capital. All four firms previously participated in Hyperion's Series A round, which brought in an undisclosed amount of funding shortly after the South San Francisco-based company was founded in late 2006.

Hyperion President and CEO Chris Rivera, who most recently served as senior vice president of commercial operations at Tercica Inc., said he wanted to form a company focused on gastrointestinal diseases and hepatology because he saw "a number of interesting GI assets being divested from big companies."

The first asset Rivera and team identified was a suite of products from Ucyclyd Pharma Inc., a subsidiary of Scottsdale, Ariz.-based Medicis Pharmaceutical Corp.

Hyperion paid Ucyclyd $10 million for the right to copromote two marketed products, Ammonul (sodium phenylacetate/ sodium benzoate) and Buphenyl (sodium phenylbutyrate), as well as conduct clinical trials with Ammonul and with a next-generation version of Buphenyl known as GT4P.

Ammonul and Buphenyl are the only two FDA-approved treatments for urea cycle disorders (UCD), an inherited condition in which patients lack a key enzyme needed to remove ammonia from the bloodstream. The disorder affects up to one in 10,000 newborns and can cause brain damage, coma and death if not treated.

Fortunately, "if diagnosed and treated early, the survival rate is very good," Rivera said. Thus, Hyperion's specialty sales force, which will take over all U.S. sales for Ammonul and Buphenyl, will focus on increasing awareness of the disease, its diagnosis and the treatments.

Ammonul and Buphenyl are what Rivera calls "ammonia scavengers." Both form complexes that bind ammonia and excrete it from the body.

Ammonul works quickly and is used in acute treatment, while Buphenyl is intended for chronic management of UCD.

Because of their ammonia scavenging mechanism, Rivera believes the two drugs also may be applicable in the much larger market of hepatic encephalopathy (HE), which usually is caused by hepatitis or severe alcoholism and also results in a build-up of ammonia.

Hyperion plans to conduct a Phase II trial of Ammonul in HE. A Phase II trial in HE and a Phase I/II trial in UCD are also in the works for GT4P, a prodrug of Buphenyl.

Jim Healy, general partner with Sofinnova, said GT4P may offer "better safety and efficacy" than Buphenyl.

The deal with Ucycld gave Hyperion worldwide rights to GT4P. If the product gains approval for UCD, Hyperion also will have the option to buy Ammonul and Buphenyl. As of now, Ucycld books the sales for those products and pays Hyperion a percentage, but a buy-out would result in Hyperion booking sales and paying milestones and royalties to Ucycld.

Hyperion eventually plans to license additional assets for its pipeline, but Rivera said right now the company is focused on getting "up and running." The Series B funding will be used to expand Hyperion's management team as well as to advance clinical trials and begin promotions for Ammonul and Buphenyl.

Concurrent with the financing, Hyperion appointed Healy, Mike Raab of New Enterprise Associates, Bijan Salehizadeh of Highland Capital Partners and Don Santel, former CEO of CoTherix Inc., to its board of directors.

In other financing news:

• Bar Harbor BioTechnology Inc., of Trenton, Maine, closed a Series A financing led by Borealis Ventures with participation by Village Ventures. The specific amount raised in the "multimillion dollar" round was not disclosed, but is expected to take the company's first product to market and fund development of next-generation products. Bar Harbor BioTechnology develops qPCR assays and other products to support gene expression research.

• Lectus Therapeutics Ltd., of Cambridge, UK, secured a £3 million (US$6.05 million) investment from medical research charity Wellcome Trust. The funding is earmarked specifically for the identification of new, selective potassium channel modulators for multiple sclerosis, and Wellcome retains the option to fund preclinical and clinical development of any candidates identified. Lectus will use its Leptics functional proteomics platform, which identifies ion channel modulators.