By Mary Welch

Staff Writer

Metabolex Inc. raised $10.75 million in a private equity financing round designed to fund development of MBX-102, its glucose-lowering diabetes drug expected to enter Phase I trials this year.

One of the investors in the Hayward, Calif.-based company was Bay City Capital, of San Francisco, which also advised Metabolex. Other investors included Pictet & Cie, of Geneva, Switzerland; the Acorn USA Fund of Wanger Asset Management LP, of Chicago; and Lombard Odier Ltd., of Zurich, Switzerland. John Hancock Life Insurance Co., of Boston, led the financing.

“It exceeded our expectations,” said Kenneth Luskey, vice president of medicinal affairs for Metabolex.

Founded in 1991, the privately held company has raised more than $60.75 million. Previous investors include Charter Ventures, of Palo Alto, Calif., and John Hancock.

The company expects to file an investigational new drug application for MBX-102 later this year to begin clinical testing. In animal models the compound demonstrated the ability to enhance insulin sensitivity, which lowered glucose levels. In addition, it lowers triglycerides and LLD – or “bad” cholesterol. MBX-102 is unpartnered.

The company’s second program focuses on glucose transport signal transduction pathways (GTST), and is partnered with Abbott Laboratories, of Abbott Park, Ill. (See BioWorld Today, June 26, 1997, p. 1.)

The company’s third pharmaceutical program is genomics-based and aimed at developing drugs to counteract insulin secretion defects in Type II diabetes. The company is partnered with the Parke-Davis Pharmaceutical Research division of Morris Plains, N.J.-based Warner-Lambert Co. in a deal worth more than $50 million. (See BioWorld Today, Jan. 7, 1999, p. 1.)