West Coast Editor

DiObex Inc., a venture capital start-up formally begun in 2003, licensed patents and intellectual property related to cortisol synthesis inhibitors as therapy for metabolic diseases from Cortendo Invest AB for undisclosed terms.

Research suggests higher cortisol leads to insulin resistance, visceral fat, high cholesterol and elevated blood pressure - all present in Type II diabetics and pre-diabetics - and Gothenburg, Sweden-based Cortendo has generated Phase II data showing that when cortisol synthesis is blocked using ketoconazole, those parameters improve.

San Francisco-based DiObex CEO Daniel Green is expected to present those data during the Dow Jones Venture One Summit in San Francisco today.

"I'll also show some of the preclinical data on the isomer that lead us to believe it's a better product," he told BioWorld Today, and DiObex plans to file an investigational new drug application this year and begin a multidose Phase I trial next year.

Ketoconazole has other uses. Barrier Therapeutics Inc., of Princeton, N.J., is developing a gel formulation for seborrheic dermatitis, and the compound has undergone several Phase III trials. As an antifungal, the member of the imidazole class has been available in the U.S. since 1981, marketed by the Janssen Pharmaceutica division of Johnson & Johnson.

DiObex's very low dose glucagon product is undergoing Phase I/II trials to reduce or prevent insulin-induced hypoglycemia in Type I diabetics. The 29-amino-acid peptide glucagon plays a major role in keeping blood glucose normal.

Since both are derived from products already on the market, the development risk is lower and should move along more quickly, Green noted, forecasting launch of either or both in "the four- to five-year time frame," though the products are "very different in terms of development complexity." Glucagon is an injectable peptide and ketoconazole is an oral small molecule.

With five employees, DiObex - whose name derives from diabetes, obesity and Metabolic Syndrome X - has enough cash to last until the first quarter of next year.

"We expect a Series B round in the early part of 2006, which I assume will be a venture round, as well," Green said. The company's formal plan targets 13 employees by the end of this year, "but we probably won't go that far," he said. "We're very virtual."

Green formerly was vice president of business development at ARYx Therapeutics Inc., of Santa Clara, Calif., and served as vice president for Parke-Davis/Warner Lambert, now part of New York-based Pfizer Inc.