Assistant Managing Editor

Proving that big pharma firms aren't the only ones interested in the orphan disease space, venture investors are getting behind 2010 start-up Ultragenyx Pharmaceutical Inc. to the tune of $45 million.

One of the largest designated Series A financings so far this year – beaten only by Ascletis Inc., which closed a $100 million round led by a Chinese real estate billionaire rather than traditional venture capitalists – Ultragenyx's raise will support its rapidly advancing rare disease pipeline, including the first clinical trial of a lead program in hereditary inclusion body myopathy (HIBM) slated to start next month.

TPG Biotech and Fidelity Biosciences co-led the round, with participation from European investor HealthCap, as well as Pappas Ventures. All have experience investing in rare diseases and are committed to helping the firm to build out a pipeline, said Ultragenyx's founder, president and CEO Emil Kakkis.

"This is not just a venture investment to advance a single product and flip it," he told BioWorld Today. Investors are committed to building the company and "wanted to put enough money into it to see that come to a reality."

Kakkis is no stranger to the rare disease space, either, having spent 11 years at BioMarin Pharmaceutical Inc. a firm that has made its name with mucopolysaccharidosis enzyme replacement therapies Naglazyme (galsulfase) and Aldurazyme (laronidase) and Phe-lowering drug Kuvan (sapropterin dihydrocholoride) for orphan disease phenylketonuria.

"This is a chance to start again, to take everything I learned at BioMarin and really hone the rare disease model," Kakkis said of Ultragenyx – its name an abbreviated version of "ultra-rare genetic diseases."

During its first year, Ultragenyx – operating on seed money from Kakkis and two former colleagues – managed to move its lead program through an investigational new drug application and ink a Japanese partnership to help accelerate development. That program, UX-001, is aimed at HIBM, a progressive muscle-wasting disease believed to be caused by a defect in the biosynthetic pathway for sialic acid.

Animal studies showed that replacing sialic acid restored the sialylation biochemistry and helped reduce the muscle disease. UX-001 is an extended-release version of sialic acid designed to provide a continuous 24-hour dose, Kakkis said.

Beyond UX-001, Ultragenyx plans to target lysosomal storage disorders, though the Novato, Calif.-based firm has not yet disclosed specific indications.

The solid Series A round should allow the company to build out its team, hiring about 25 people, and put together development plans for the first three candidates.

"We hope to get through two proof-of-concept studies and maybe a third" on the funding, Kakkis said.

"Our ultimate plan is to go for an IPO," he added. Even in a depressed initial public offering market (IPO), a rare disease firm going public is "plausible," because the indications are small enough to require only minimal funding to get a product through the clinic, something a small biotech could readily handle.

"It might be the kind of story to do well in an IPO," he said. Ultragenyx also will consider select partnership opportunities, provided they help speed up development and "allow us to put more products into play."

But eventually building its own sales force is certainly part of the plan. "If you look at the history of rare disease firms, you can't give away your commercial rights and be successful," Kakkis said.

In connection with the Series A round, Eran Nadav, of TPG; Ben Auspitz, of Fidelity; and Marten Steen, of HealthCap, joined Ultragenyx's board.

In other financings news:

• Aegerion Pharmaceuticals Inc., of Cambridge, Mass., filed a registration statement to sell about 3.25 million shares of common stock. The firm has not yet priced the proposed offering, but based on Friday's close of $17.72, the offering could bring in about $57.6 million. Funds will be used to prepare and submit a new drug application for lead product lomitapide in homozygous familial hypercholesterolemia (HoFh), complete clinical and nonclinical studies in HoFH, advance development of the drug in pediatric and adolescent patients and for general corporate purposes. In addition to the company's offering, shareholders will be selling 1 million shares of common stock, though Aegerion will not receive any proceeds from that sale. The firm and selling stockholders have granted underwriters the option to purchase 637,500 in additional shares to cover overallotments. Jefferies & Co. Inc. and Deutsche Bank Securities Inc. are acting as joint book-running managers, while Leerink Swann LLC, Needham & Co. LLC and Collins Stewart LLC serving as co-managers. Shares of Aegerion (NASDAQ:AEGR) closed Monday at $17.43, down 29 cents.