Staff Writer

Versartis Inc. is off to a fast start since its founding six months ago, with enough money in hand to get at least one of its preclinical products for diabetes and growth hormone deficiency into the clinic within a year.

The Redwood City, Calif.-based company just closed a Series A financing that could bring in as much as $16 million, which will go toward the company's goal of moving one of its product candidates into the clinic.

Versartis, a joint venture between Amunix Inc. and European venture capital firm Index Ventures, has generated preclinical proof-of-concept data in more than one animal model for three of its preclinical products in Type I diabetes (exenatide and IL-1ra) and growth deficiency (VRS-317). Those compounds are based on Amunix's half-life extension recombinant PEGylation technology.

Versartis founder and CEO Jeffrey Cleland told BioWorld Today that the company may have news soon, perhaps this month, on which of its products would get priority. That decision, he said, would be based on the level of interest in the industry, clinical feedback and the market opportunity.

If the company were to secure a partner, it could accelerate a second compound to Phase I, he said. But, flush with cash from its recent financing, Versartis is no rush to find a partner, Cleland said. The company is still in introductory discussions and sharing its results, he said.

Versartis is presenting data at this week's American Diabetes Association (ADA) meeting in New Orleans and that could give the start-up biotech some added momentum.

Abstracts published at the ADA meeting for two of its drug candidates aimed at diabetics, VRS-859 (exenatide-rPEG) and VRS-808 (glucagon-rPEG), suggest that those compounds may have the potential for significantly less frequent dosing and fewer side effects than products currently on the market or in development. In addition, the two compounds also appeared to have a clean toxicology profile at very high doses in preclinical studies.

One of the compounds, exenatide, may become a best-in-class glucagon-like peptide-1 (GLP-1) analog for the treatment of Type II diabetes, according to Versartis. The half-life extension expected with exenatide could enable monthly dosing in humans.

The current approved regimen of exenatide (marketed as Byetta by Amylin Pharmaceuticals and Eli Lilly and Co.) for Type II diabetes mellitus requires twice-daily dosing. Common side effects of that treatment regimen include nausea and hypoglycemia, possibly caused by the high peak levels of exenatide after each injection, according to Versartis.

Novo Nordisk's liraglutide is close to coming on the market as a once-a-day treatment. Other late-stage products are being developed for once-weekly dosing.

Cleland said the market for GLP-1 analogs could be more than $5 billion by 2014 and Versartis' compound may have the potential for superior efficacy, less nausea and better weight loss and weight control.

Its other compound for diabetics, glucagon, has the potential to prevent nocturnal hypoglycemia (low blood sugar levels) during sleep. The short half life of glucagon prevents its use in nocturnal applications without complicated pump or depot system approaches, according to Versartis.

But Versartis' compound for growth deficiency could be dosed as infrequently as once a month, given in small volume with a small needle, Cleland said. Other firms are working on once-a-week forms for growth deficiency, a roughly $2.5 billion market.

Cleland, formerly of South San Francisco-based Genentech Inc., served in leadership roles in the successful approval of Herceptin (trastuzumab) and Nutropin Depot (somatropin [rDNA origin]), as well as early work on Lucentis (ranibizumab), Avastin (bevacizumab) and Omnitarg (pertuzumab).