Founded around a migraine molecule licensed from Eli Lilly and Co., CoLucid Pharmaceuticals Inc. - based, like Lilly, in Indianapolis - raised $16.5 million to continue its work with that program and a portfolio of preclinical assets from its bifunctional neuromodulator platform.
"We're seeing more of that being done," said Arthur Pappas, partner at Pappas Ventures, of Research Triangle Park, N.C., referring to the Lilly out-licensing. Pappas Ventures provided seed money and funds for CoLucid, which, at this point, has no management and no employees.
His firm began "more than a year ago" the process of checking Lilly's programs for those that would be de-prioritized but still deemed worthy. Pappas does the same with the likes of London-based GlaxoSmithKline plc and Pfizer Inc., of New York.
"It's not productive to the pharma company to continue to back-burner good programs, and it gives them an interesting way to leverage what they've put to work," he noted. "They can always get in the queue to buy back [into the program]."
The other part of CoLucid, its neuromodulator platform targeting disorders such as Alzheimer's disease, originated at Providence, R.I.-based Sention Inc., which was last heard from about a year ago, when the firm licensed a family of metabotropic glutamate receptor antagonists to treat mental retardation from Merck & Co. Inc., of Whitehouse Station, N.J. (See BioWorld Today, Jan. 21, 2005.)
"MPM [Capital, of Boston] knew about our efforts and told us about the Sention compounds, and knew that they were planning to rationalize the company," Pappas told BioWorld Today. "We had looked at Sention, and we did some due diligence on their programs. Our vision would be in two years to have the Lilly compound Phase III-ready, and at least one or two of the Sention compounds ready for Phase II."
The Lilly and Sention deals were done "pretty much in parallel," he added.
To set up CoLucid, Pappas' firm "went to basically five VC groups that we have worked with before," he said. "Domain [Associates, of Princeton, N.J.] stepped in very quickly when they saw the uniqueness of the migraine program, and they knew the Sention program exceptionally well."
Domain co-led the Series A, with other investors including Triathlon Medical Ventures, of Cincinnati, and Pearl Street Venture Funds, of Indianapolis. Pappas, along with Jesse Treu, of Domain Associates, and James White, an independent biopharmaceutical consultant, will be joining CoLucid's board.
White, also with Hypnion Inc., of Lexington, Mass., also is a Lilly alumnus, and the migraine compound is "one that was discovered under my watch when I was director of CNS research" there, he told BioWorld Today, predicting that pharma spinouts like this one will be "more and more a trend."
Pappas said the company will be run "relatively virtual for the first, say, six months while we finalize discussions that we're having for a CEO, and build out a more active scientific advisory board."
How soon might CoLucid boast a marketed drug?
"We have been asked that question," said Geoffrey Erickson, a principal at Pappas. "Right now, the company is in the process of developing its strategy. The important point is that this molecule has been tested in humans successfully already in a safety trial done by Lilly."