On the heels of positive data from a Phase IIa trial of PHX1149, a DPP-4 inhibitor, in Type II diabetes, Phenomix Corp. brought in $55 million in a Series C financing to advance that program through the next stage of development.

New investor Nomura Phase4 Ventures, of London, led the financing, which primarily will be used to fund upcoming trials of PHX1149, including a 12-week Phase IIb study expected to start in the second quarter, and to move forward with programs earlier in the company's pipeline. To date, Phenomix has raised about $120 million.

The recent round "mirrors our own level of enthusiasm," said Laura Shawver, president and CEO of the private San Diego-based firm, especially coming a few days after Phenomix reported results from a Phase IIa study showing that the orally administered PHX1149 met its primary endpoint of improving postprandial glucose in 174 Type II diabetics. The drug, which is designed to work by selectively inhibiting the serine protease dipeptidyl peptidase (DPP)-4, also met secondary endpoints related to HbA1c and GLP-1 levels.

"We were very optimistic, based on our nonclinical data, that we would have a drug that was orally efficacious with an excellent safety profile," Shawver told BioWorld Today, and that "was born out in the Phase II trial."

Plus, she added, "the tolerability profile was just remarkable," and if confirmed in late-stage trials, could give PXH1149 a commercial advantage over other oral DPP-4 inhibitors, a space that has become increasingly competitive. In October, Whitehouse, N.J.-based Merck & Co. Inc. gained FDA approval for Januvia (sitagliptin) in Type II diabetes. Another product, Galvus (vildagliptin), from Basel, Switzerland-based Novartis AG, was deemed approvable earlier this year, though the FDA requested an additional clinical study.

"It certainly is a changing landscape," Shawver said. "It helped when Januvia was approved and showed that [a product] could be delivered orally, once-daily."

However, she added, Januvia "has some issues with patients who have impaired renal function, due to the way the drug is cleared." Based on data so far, it's believed that PHX1149 will not encounter the same difficulty.

"Everybody that has looked at PXH1149 is quite excited about the future prospects," she said. "It's why we were able to do such a large financing. There was a lot of interest."

Joining Nomura in the round were several existing investors: JP Morgan Partners, Delphi Ventures, Alta Partners, Sofinnova Ventures, Bay City Capital and CMEA Ventures, all of San Francisco, and New York-based Baker Brothers, Basel, Switzerland-based Novartis BioVenture Fund and Melbourne, Australia-based GBC Venture Partners.

Funding is expected to get PHX1149 through Phase IIb, though how long it will sustain the company's operations largely depends upon future partnering opportunities. Phenomix anticipates beginning discussions soon, looking for a partner with a far-reaching distribution channel and an established sales force in the primary care market.

Behind its diabetes program, the company has a number of early stage programs, including a hepatitis C virus compound in preclinical development. That program is targeting the hepatitis C protease NS3/4A, which is linked to viral replication. Phenomix' plan is to develop an oral agent that requires less frequent dosing than existing HCV products.

The company last raised money about two years ago, when it pulled in $40 million in a Series B. (See BioWorld Today, May 25, 2005.)

In other financings news:

• MultiCell Technologies Inc., of San Diego, completed a financing agreement with La Jolla Cove Investors for up to $13 million to support development of its lead programs, including MCT-125, which is in Phase IIb studies for chronic fatigue in multiple sclerosis patients, and MCT-475/MCT-465, which are in preclinical development for colorectal cancer. MultiCell said the deal will provide additional capital over the next several years. Under the terms, MultiCell will sell three convertible debentures to LJCI, and also granted the investment firm a warrant to purchase up to 10 million shares of stock at a price of $1.09 per share over the next five years.

• Rosetta Genomics Ltd., of Rehovot, Israel, said underwriters of its recent initial public offering on Nasdaq exercised their overallotment option on 562,500 additional shares. Totals for the IPO were about 4.31 million shares at $7 per share and $30.2 million in gross proceeds. Net proceeds were about $26.2 million. C.E. Unterberg, Towbin LLC was lead manager for the offering. Oppenheimer & Co. Inc. was co-manager. (See BioWorld Today, Feb. 28, 2007.)

• Stem Cell Therapeutics Corp., of Calgary, Alberta, said it is raising C$2 million (US$1.7 million) through the sale of 4 million units. Each unit will consist of one common share and half a warrant. Each full warrant would entitle the holder to purchase one additional share at C$0.75 for one year from closing, or at C$1 for an additional year. The financing has been fully subscribed and is expected to close in a week to 10 days. Funds will support development of the company's NTx-265 program in stroke, as well as other programs. NTx-265 is a two-drug regimen consisting of human chorionic gonadotropin, which aims to increase the number of neural stem cells in the brain, and erythropoietin, designed to promote the differentiation of those newly formed NSCs into new neurons.

• Potentia Pharmaceuticals Inc., of Louisville, Ky., said it closed a $5 million round of financing. The funds will be used in part to support preclinical and clinical development of POT-4, a derivative of Compstatin, a peptide that inhibits complement activation. Privately held Potentia initially is developing POT-4 for the treatment of age-related macular degeneration.