Assistant Managing Editor

Three months after reporting positive top-line data from its Phase III study of oral calcitonin in postmenopausal osteoporosis patients, Tarsa Therapeutics Inc. disclosed a $24.5 million financing round that should get the Philadelphia-based firm through a new drug application (NDA) filing later this year.

The internal round is the second substantial fund raising for the company, which was formed in 2009 to develop the late-stage product in-licensed from Unigene Laboratories Inc. A Series A round that year brought in $24 million from venture investors MVM Life Science Partners, Quaker BioVentures and Novo A/S. All three plus Unigene returned for the latest investment.

Proceeds should cover the NDA submission for Tarsa's oral recombinant salmon calcitonin in osteoporosis treatment, as well as advance further clinical work in osteoporosis prevention, and support general corporate purposes.

Amid the crowded osteoporosis treatment market, dominated by bisphosphonates such as Merck & Co. Inc.'s Fosamax (alendronate), with competition from selective estrogen receptor modulators, human parathyroid hormone drugs and Amgen's Inc. RANK ligand inhibitor Prolia (denosumab), calcitonin has commanded only about 3 percent to 4 percent share – about half a billion globally.

Part of that is due to the fact that it hasn't been promoted over the past several years, noted David Brand, Tarsa's president and CEO, though he added that physicians continue to prescribe it for its "well-known record of safety."

But the other limiting factor to calcitonin's use has been administration. While it's available as an injectable, it's more widely used nasally, a formulation that has not lent itself to good patient compliance, Brand said.

But an oral version could prove a solid option for patients, especially as safety issues on existing drugs continue to come to light. Only last fall, the FDA ordered makers of bisphosphonates to include label warnings about the possible risk of femoral fracture. Infrequent cases of osteonecrosis of the jaw also have been linked to bisphosphonates, as well as Amgen's Prolia. (See BioWorld Today, Oct. 14, 2010.)

Calcitonin, on the other hand, "has very few side effects," Brand told BioWorld Today. As an analogue of human calcitonin, Tarsa's drug is about 30 times more potent, and in prior studies was able to deliver sufficient blood levels of calcitonin and reduce levels of biomarkers of bone resorption.

"So it's well proven, with few safety concerns," he added.

The 565-patient Phase III ORACAL trial, conducted under a special protocol assessment, hit its primary endpoint, showing that Tarsa's drug was significantly superior to placebo and noninferior to a calcitonin nasal spray in increasing lumbar spine bone mineral density after one year of treatment in postmenopausal women with osteoporosis. Detailed data from the study will be presented at the American Society for Bone and Mineral Research meeting in September. (See BioWorld Today, March 25, 2011.)

If Tarsa wins a first-pass approval at the FDA, its product will be the first oral calcitonin on the market. Coming up is another oral calcitonin from Novartis AG. The Swiss pharma firm's candidate uses a drug delivery technology from Cedar Knolls, N.J.-based Emisphere Technologies Inc. and manufacturing technology from Unigene. Tarsa also plans a European application in early 2012.

For now, the small biotech holds worldwide rights to its oral calcitonin, excluding China, under its agreement with Boonton, N.J.-based Unigene. "And we have a number of options" going forward, Brand said. Tarsa might consider commercializing the product on its own, or seek a partner or partners. "We look forward over the next couple of months to strategic discussions," he said.

The firm also is testing its drug in a Phase II study in preventing osteoporosis. That trial, designated TAR01-201, is comparing Tarsa's oral calcitonin to placebo in about 120 postmenopausal women with osteopenia. Patient enrollment was recently completed, and Brand said six-month data are expected early next year.

In other financing news:

• Cytori Therapeutics Inc., of San Diego, is pulling in gross proceeds of $6 million through an equity purchase agreement with Seaside 88 LP. Under the terms, Seaside completed the purchase of about 1.3 million common shares of Cytori priced at $4.52 each. It also committed to purchase an additional 5 million shares over a nine-month period beginning Aug. 12. Proceeds are expected to help fund the ADVANCE European pivotal trial, designed to test adipose-derived stem and regenerative stem cells processed by the Celution system in patients with acute heart attacks. Funds also will go toward starting a U.S. cardiac clinical trial, a European indication-for-use for the Celution system in treating nonoption chromic myocardial ischemia patients, Celution regulatory approvals in additional countries and a strategic partnership. Shares of Cytori (NASDAQ:CYTX) gained 1 cent Tuesday to close at $5.22.