As it shifts its focus from discovery and preclinical testing to early clinical development, 2-year-old Sirtris Pharmaceuticals Inc. raised $22 million in a Series C round and secured another $15 million through a debt placement.
The Cambridge, Mass.-based company, founded in spring 2004, plans to bring its lead sirtuin therapeutics into human studies with the funds.
"The use of the proceeds is to help the company move into clinical trials in one to two indications by the end of this year or early next year," said Sirtris' CEO and co-founder Christoph Westphal.
The company focuses on seven human sirtuins that could be targets for treating cancer or metabolic, inflammatory and neurodegenerative disorders. It licensed its technology from Harvard University, at which company co-founder David Sinclair conducted work in the area as an assistant professor of pathology. Other Sirtris founders are Rich Aldrich, Richard Pops and Paul Schimmel.
If successful in clinical trials, sirtuin therapeutics could represent a new class of drugs for treating disorders such as Type II diabetes. Sirtris expects the first clinical trials to focus on lowering glucose and reducing weight in Type II diabetics, and to treat neurodegenerative conditions, such as amyotrophic lateral sclerosis, Huntington's disease and certain rare mitochondrial disorders.
The company's lead candidate could compete with San Diego-based Amylin Pharmaceuticals Inc.'s Byetta (exenatide), a twice-a-day injectable that lowers glucose and weight in diabetes patients.
Approved in April 2005, Byetta has "created a lot of value for Amylin," Westphal said. It had sales of $49.7 million in the fourth quarter, and analyst Jim Reddoch, of Arlington, Va.-based Friedman, Billings, Ramsey & Co., has said 2006 sales could reach $415 million.
But Sirtris' products could have a significant advantage over Byetta. "We're talking about orally available agents that would control glucose and control weight," Westphal said. "Obviously, if that were true, that would be an extraordinary breakthrough."
For a large market like Type II diabetes, Sirtris expects to seek a development and commercialization partner sometime after Phase IIb trials, but it still has an opportunity to bring other programs even further forward, building more value, Westphal said.
"There are also these narrow indications that have high medical need, such as Huntington's, ALS and rare mitochondrial disorders," he said, "where a company such as us can move up to registration on our own."
Since its founding, Sirtris has raised $82 million, which includes the three rounds and the $15 million debt financing from Hercules Technology Growth Capital, of Boston. Sirtris expects to initially draw down $10 million of that debt.
Bessemer Venture Partners, of Wellesley, Mass., led the Series C round, which included investments from Genzyme Ventures, of Cambridge, Mass.; QVT Fund LP, of New York; and Alexandria Real Estate Equities Inc., of Pasadena, Calif. Previous investors are Polaris Venture Partners, of Waltham, Mass.; TVM Capital, of Munich, Germany; Cardinal Partners, of Princeton, N.J.; Skyline Ventures, of Palo Alto, Calif.; Three Arch Partners, of Portola Valley, Calif.; The Wellcome Trust, of London; Novartis Bioventures Fund, of Basel, Switzerland; Cargill Ventures, of San Mateo, Calif.; Cycad Group, of Carpinteria, Calif.; Hunt Ventures, of Dallas; and Red Abbey, of Baltimore.
"This funding is at least three and a half years of cash for the company," Westphal said, "so we hope to complete Phase Ib studies and to generate proof-of-concept data with this funding."
In other financing news:
• Discovery Laboratories Inc., of Warrington, Pa., entered a $50 million committed equity financing facility with Kingsbridge Capital Ltd. to support the company's growth. Upon effectiveness of the new facility, the company's 2004 financing facility, which presently has capital of up to $47.6 million available, automatically will terminate. The new deal, along with Discovery's existing cash, should provide it with enough money to progress Surfaxin through the final stages of the U.S. and European regulatory review and approval processes for the initial indication of respiratory distress syndrome in premature infants.
• Gilead Sciences Inc., of Foster City, Calif., priced $600 million in convertible senior notes due 2011 and $600 million in convertible senior notes due 2013, for an aggregate of $1.2 billion, representing an increase of $100 million from the transaction size announced earlier this week. Gilead granted the initial purchasers an option to buy an additional $50 million of the 2011 notes and $50 million of the 2013 notes to cover overallotments. The company expects to use net proceeds to repurchase about $545 million worth of common stock, and to fund convertible note hedge transactions. Any remaining proceeds will go toward working capital and general corporate purposes.
• Halozyme Therapeutics Inc., of San Diego, said holders of its various outstanding warrants have exercised rights to purchase a total of about 1.5 million shares of common stock since Jan. 1, resulting in net proceeds to the company of about $1.9 million. Halozyme intends to use the funds to continue advancement of its lead oncology product candidate, Chemophase, and to commercialize Hylenex, for use as an adjuvant to increase the absorption and dispersion of other injected drugs.
• Peakadilly NV, of Ghent, Belgium, closed a Series A financing raising €6 million (US$7.4 million). Life Science Partners and Johnson & Johnson Development Corp. led the transaction. Peakadilly also appointed Nick McCooke as CEO, and Martijn Kleijwegt and Zeev Zahavi as nonexecutive directors representing the lead investors. Proceeds will be used to increase the capacity of Peakadilly's protein biomarker discovery operation based on its MASStermind technology.
• Theratechnologies Inc., of Montreal, said underwriters of a recent offering exercised an overallotment option for 692,500 additional common shares for gross proceeds of about $1.4 million. In March, the company issued 10.5 million common shares raising about $20.5 million. The closing of the overallotment option brings the total gross proceeds to $21.8 million. Net proceeds are being used to finance two Phase III studies of TH9507 in HIV-associated lipodystrophy and additional working capital requirements.