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Pearl Prepares for Phase III Push with $65M Series D

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By Catherine Shaffer
Staff Writer

Pearl Therapeutics Inc.'s consortium of investors returned for a Series D financing round worth $65 million. The funds, provided by lead investor Vatera Capital, along with 5AM Ventures, Clarus Ventures and New Leaf Venture Partners, will support Phase III studies of Pearl's candidate for chronic obstructive pulmonary disease (COPD), PT003.

The product is a combination of a long-acting muscarinic antagonist (LAMA) and a long-acting beta-2 agonist (LABA) delivered through a metered-dose inhaler.

The new financing brings Pearl's total to $167.5 million raised since 2007.

That group of investors has shown a long-term commitment to Pearl and its pipeline. "One of the reasons we believe they have been so committed to Pearl is the background several of them have in respiratory disease," Lyn Baranowski, Pearl's vice president of business development, told BioWorld Today.

New Leaf Ventures' James Niedel was chief science and technology officer for GlaxoSmithKline plc, and was involved in that firm's respiratory programs, Baranowski said, while Michael Jaharis, founder of investor Vatera Capital, has had a long history in the respiratory space at Key Pharmaceuticals Pty. Ltd. and Kos Pharmaceuticals Inc.

Vatera's Thomas Koestler also has relevant experience, having been the head of research and development at Schering-Plough Corp., where he worked on that company's asthma and COPD programs.

"We believe this background provides them with important insights into the medical need, technical hurdles and competitive dynamics for developing such products," Baranowski said.

Last month, the Redwood City, Calif.-based company completed a dose-ranging, Phase IIb trial of PT003, testing five twice-daily doses of the drug. Multiple doses of PT003 were found to provide superior bronchodilation compared to open-label tiotropium and monotherapy components.

Pearl used those data, along with previous results identifying minimally effective doses, to select an optimal dose of PT003 for Phase III testing.

The Series D will allow Pearl to do the scale-up and preparatory work required to begin its Phase III program. "We will require additional capital to fund PT003 through Phase III regulatory filings and commercialization," said Colin Reisner, Pearl's chief medical officer.

Pearl is considering various scenarios to bring in that capital, including an initial public offering, a private investment, licensing agreements "or more likely a combination of two or more of these," Reisner said. "Regarding commercialization, we would certainly consider a partner to share the financial and logistical expense of a product launch. However, the strong support we have from our venture backers may allow us to retain rights to our full portfolio of products should we decide that is the best course."

According to Pearl, it was the first company to combine glycopyrrolate, a LAMA, with formeterol, a LABA, by using its porous particle technology to create stable suspensions in HFA propellants.

That strategy circumvents chemical and manufacturing problems that had previously prevented formulations of LAMA/LABA combos in the past.

Pearl also has completed Phase IIa studies that it said show safety and efficacy of the individual components: glycopyrrolate, designated PT001 , and formoterol, PT005.

Room for Improvement in COPD Market

The overall market for COPD is estimated at more than $8 billion and growing, and companies such as GlaxoSmithKline, Boehringer Ingelheim GmbH, Merck & Co. Inc., Pfizer Inc., Novartis AG and AstraZeneca all have products in that space.

The leading LAMA, Spiriva (tiotropium bromide), is marketed by Pfizer Inc. in the U.S., and was developed by Boehringer Ingelheim.

Novartis' Foradil (formoterol dry-powder inhaler) is the top-selling LABA.

The GOLD Guidelines for treatment of COPD patients who need more than one medication call for use of a once-daily LAMA, like tiotropium, plus a twice-daily LABA, such as formoterol or salmeterol. Alternately, some physicians prescribe an inhaled corticosteroid with a LABA.

Products combining a LABA with an inhaled corticosteroid include AstraZeneca's Symbicort (budesonide/formoterol) and GlaxoSmithKline's Advair (fluticasone/salmeterol). However, physicians tend to prefer treating patients with long-acting agents before adding on steroids.

According to Pearl, patients often are prescribed two inhalers, one containing a LABA and one a LAMA, in order to achieve control of COPD, before moving on to corticosteroids. PT003 would offer a similar therapy in a single dose and format.

"The availability of a LAMA/LABA would provide an important step in the COPD treatment algorithm," Reisner said.

A competing product by Sosei Group Corp., of Tokyo, designated QVA149 (indacaterol maleate/glycopyrronium bromide), is a LABA/LAMA combo. Sosei and its partner Novartis recently reported that the drug met its primary endpoint in a fifth Phase III trial in more than 2,000 subjects, showing a statistically significant reduction in moderate-to-severe exacerbations of COPD compared to patients treated with glycopyrronium 50 mg.

The companies filed a marketing authorization application for European approval in October, and an application for registration in Japan in November. The product is on schedule for U.S. registration review in 2014.

Pearl said it believes that PT003's twice-daily dosing and porous particle delivery technology give it an advantage over its competition.

And the the drug's risk profile could prove an important difference. "We feel that one way we stand apart is in our very comprehensive Phase II program, which we believe de-risks the Phase III in meaningful ways," Baranowski said, adding that the FDA's guidelines for development and approval of respiratory products include requirements for inhaled products to contain the optimal dose of drug and have the most appropriate dosing regimen. That is work that Pearl feels it did very thoroughly in Phase II.

In other financings news:

• Cardioxyl Pharmaceuticals Inc., of Chapel Hill, N.C., said it raised $28 million in a Series B financing led by OrbiMed Advisors. New investor Osage University Partners also participated, along with returning investors New Enterprise Associates and the Aurora Funds. Proceeds will be used to further advance the firm's second-generation nitroxyl donor programs for the treatment of acute and chronic heart failure. OrbiMed's Peter Thompson and Anthony G. Johnson joined the board in connection with the financing round.