A fourth round of venture capital financing brought in $55 million for ARYx Therapeutics Inc.
Based in Santa Clara, Calif., the privately held company said it would use its Series D funding for product development. Its specific plans relate to its two clinical programs, ATI-2042 and ATI-7505, which ARYx expects to develop through Phase II in anticipation of eventual commercial partnerships.
"I would say there are three things that made us competitive in today's environment," ARYx CEO Peter Milner told BioWorld Today. "The first is the management team, which we have filled with people with different skill sets and backgrounds. Second was our platform that allowed us to invent drugs for large chronic markets in a relatively rapid time frame and at a low cost. And the third thing was the quality of the investors we already had."
A new syndicate of backers joined those existing investors to support ARYx, which has raised about $82 million since its 1998 inception. Milner said the company's product opportunities portend a promising future for ARYx.
ATI-2042 is a treatment for atrial fibrillation, while ATI-7505 is in development for gastroesophageal reflux disease and gastroparesis. Both products stem from the ARYx RetroMetabolic technology, a chemistry approach the company employs to remove metabolism and other safety problems from existing drugs.
"We focus on drugs that patients have come to rely upon as important therapy, but which have been discovered to have significant toxic side effects," David Nagler, ARYx's vice president of corporate affairs, told BioWorld Today. "Then we re-engineer those chemical compounds to maintain their original efficacy, but re-engineer the metabolite associated with that chemistry so that we can determine how rapidly the drug exits the body."
ATI-2042 is an analogue of amiodarone, a product for atrial fibrillation that has limits due to toxic side effects associated with its accumulation because of long-term use. ATI-7505 is an analogue of cisapride, a product no longer on the market because of cardiac-related side effects.
Nagler said ARYx would begin to see data from the two safety trials in 60 to 90 days, with Phase II studies scheduled to begin by the end of the year.
The company also plans to allocate a portion of its recent funding to advance a third compound into clinical development from its ATI-5000 program. ARYx expects to move a warfarin analogue, a blood-thinning compound, into Phase I by the middle of next year for preventing stroke in atrial fibrillation patients and to prevent deep-vein thrombosis.
The financing round was led by Nomura Phase4 Ventures in London. Other new investors include Jafco Life Science Investments, of Tokyo; Scottish Widows Investment Partnership, of London; Montreux Equity Partners, of Menlo Park, Calif.; Novel Bioventures, of Hong Kong; Itochu International, of Tokyo; and ATEL Ventures, of San Francisco.
The existing investors in the financing include MPM Capital, of Boston; OrbiMed Advisors, of New York; and Merlin BioMed, also of New York. In connection with the fund raising, Paul Sekhri joined ARYx's board. He is the president and chief business officer of Ariad Pharmaceuticals Inc., of Cambridge, Mass., and will serve as an independent director in representing Nomura.
"This is a global industry," Milner said. "Of the $55 million we've raised, $33 million is coming from outside the U.S. Drug safety is a major issue all over the world . . . and we will attract global money because we're solving a global problem."