Reata Pharmaceuticals Inc. raised $25 million in a Series E financing round, money that will be used to fund about nine trials in oncology and inflammation expected to be running by the end of the year.
Much of the focus will be on Phase II programs of Reata's two lead compounds: RTA 402, a synthetic triterpenoid being developed in multiple indications, and RTA 744, an anthracycline agent for brain cancers.
The Irving, Texas-based company also has a number of programs in earlier-stage development and a platform focused on discovery of drugs to correct misfolding proteins.
"It is a very important financing for us because we have advanced our lead projects in clinical studies, and achieved proof of principle in oncology with each of the drugs," said Warren Huff, president and CEO of Reata. "This allows us to move the products into mid- to late-stage clinical trials.
"We did not have difficulty raising the round," Huff told BioWorld Today. "It was primarily done with existing investors, with the addition of a handful of new investors that had been following us for some time. We have made good progress with our clinical programs."
The company, founded in 2002 on technology from the UT Southwestern Medical Center at Dallas and the M.D. Anderson Cancer Center, now has raised about $66.5 million. The RTA 402 program was licensed from M.D. Anderson and Dartmouth College.
RTA 402 is orally administered agent that regulates NF-kB and STAT3, transcription factors implicated in both inflammation and cancer, Reata said.
The product is completing a Phase I trial in solid tumors, is in Phase I/II in pancreatic cancer and this summer is being moved into a Phase II trial in metastatic melanoma.
The synthetic triterpenoid also is in a Phase I/II trial in hepatitis, while enrollment in a Phase II trial in rheumatoid arthritis is expected to begin by the end of summer, Huff said.
The potential broad applicability of the compound stems from its inhibition of inflammatory pathways, he said, which increasingly are being implicated in the spread of cancer. The goal in hepatitis is to improve liver function by reducing the inflammatory process in the liver.
Huff said early safety and activity data in solid tumors have been encouraging, and that preclinical results were "fantastic" in autoimmune disease such as rheumatoid arthritis, multiple sclerosis, psoriasis and even in the area of transplantations and graft-vs.-host disease.
"This is a totally first-in-class compound," he said. "The approach to regulating those transcription factors is completely novel."
The other clinical-stage compound, RTA 744, is in a Phase I trial in primary brain cancer and a Phase I/II study in cancers that have metastasized to the brain.
Huff said antitumor activity seen in those studies is leading to the initiation this summer of a Phase II trial in patients whose breast cancer has metastasized to the brain, and a Phase II trial in September in glioblastoma multiforme.
A trial in lung cancer would follow later if the breast cancer data appear encouraging.
Huff said RTA 744 is distinguished from other anthracycline agents like doxorubicin in that it can cross the blood-brain barrier, and therefore could have promise in brain cancers.
In the preclinical stage, Reata has RTA 404, an analogue of RTA 402 that is being developed for neurodegenerative diseases. It has an earlier-stage program licensed last year from M.D. Anderson and Dartmouth covering tricyclic bisenomes, which are structurally similar to the triterpenoids.
Reata's discovery platform is known as RPM, or Rescuing Proteins from Misfolding, which entails a set of assays for studying protein misfolding, aggregation and related processes.
The company said it has identified small-molecule chaperones that prevent or reverse misfolding of p53, a protein mutated in many cancers, and superoxide dismutase 1 (SOD1), a protein linked with development of amyotrophic lateral sclerosis.
Its lead internally generated product is RTA 801, a SOD1 stabilizer in the preclinical stage. It also has a p53 program in lead optimization.
Huff said the company has "pretty aggressive clinical programs" planned for the two lead compounds, and the new funds should take Reata through 2008.
In that time period, additional funding could come through partnership deals or other sources.
"We're addressing large, unmet needs with a novel approach," Huff said. "If the clinical data continue to be good, I'd be surprised if one or both of the programs were not partnered by the end of next year."
Reata's strategy is to get proof of principle in humans before parterning them, so it is not necessarily looking for deals on the earlier programs.
For the clinical programs, Huff said he is interested in finding partners for indications outside oncology. In oncology, Reata would be interested primarily in deals covering areas outside the U.S., since it wants to retain some or all commercialization rights in the U.S.
Existing investors including CPMG Inc., and Novo A/S led the Series E financing round.
In other financing news:
• Acorda Therapeutics Inc., of Hawthorne, N.Y., said underwriters of a public offering last month exercised their option to purchase 562,500 additional shares at the offering price of $18.50 per share. The exercise of the option increases the size of the offering to about 4.2 million shares and about $77.6 million in gross proceeds, totals that do not include 123,040 shares are sold by stockholders. (See BioWorld Today, June 11, 2007.)
• pSivida Ltd., of Melbourne, Australia, closed the first tranche of a previously disclosed registered direct offering. The company sold about 9.2 million units at $1.25 per unit, for gross proceeds of about $11.5 million. Each unit consists of one American depositary share and one five-year warrant to purchase 0.40 ADSs at $1.65 per whole ADS. The offering is expected to total $18 million. Cowen and Co. LLC is lead placement, with JMP Securities LLC co-agent. (See BioWorld Today, July 3, 2007.)