Metabolex Inc. plans to use certain proceeds from a $27 million equity financing to bankroll a Phase II trial of MBX-102, an oral small-molecule insulin sensitizer.
The company expects to begin enrolling the 256-patient trial in about two months. The financing marks a reversal for Metabolex, a privately held company founded in 1991. The Hayward, Calif.-based company was forced to lay-off 14 employees (out of 75) earlier this year when a previous financing fell apart, and it placed the MBX-102 Phase II trial on hold at the same time. (See BioWorld Today, Jan. 22, 2003.)
With the current financing complete, Mark Bagnall, Metabolex's senior vice president and chief financial officer, said the company has about $30 million in cash, which should last about two years. The current net burn rate is about $100,000 per month, an amount expected to increase when the trial begins. Bagnall said the company likely would spend about $6 million during the remainder of the year and about $15 million in 2004.
As for the employees, Bagnall said the company anticipates building back up to about 70, possibly 80 people.
MBX-102, Metabolex's lead candidate, is a patented, single optical form of halofenate, a product developed and studied in the 1970s by Merck & Co. Inc., of Whitehouse Station, N.J. MBX-102 lowers blood glucose and lipids without the gastrointestinal side effects of halofenate.
The pending study is designed to look at the impact of three doses of MBX-102 on glucose control, as well as overall safety and the potential to cause edema and weight gain. Those latter factors are significant adverse events associated with currently marketed insulin sensitizers, but were not observed to a significant degree in previous studies with halofenate, the company said.
The Phase II is expected to take 18 months to 20 months to complete, at which time Metabolex will consider partnering the product.
In Phase I studies, completed last year, MBX-102 was well tolerated at all doses and produced no significant gastrointestinal toxicity compared to placebo, Harold Van Wart, Metabolex's president and CEO, said in a prepared statement.
Elsewhere in the pipeline, Metabolex is in preclinical development with MBX-2004, another insulin sensitizer.
Also in diabetes, the company is involved in two major collaborations expected to generate about $12 million in revenue this year and $10 million in 2004. One is with New York-based Pfizer Inc. to discover drug targets related to insulin secretion, and the other is with Tokyo-based Yamanouchi Pharmaceutical Co. Ltd. to analyze 100 diabetes and obesity targets from Metabolex's database. (See BioWorld Today, July 3, 2002, and March 21, 2002.)
Metabolex and Abbott Laboratories, of Abbott Park, Ill., are partners in development on another insulin sensitizer. This deal dates back to 1997, and is not a current revenue producer for Metabolex. (See BioWorld Today, June 26, 1997.)
As part of the financing, Metabolex said it restructured its board of directors. Continuing directors are Barr Dolan and Van Wart. New directors are Carl Goldfischer, managing director of Bay City Capital LLC, of San Francisco; Sylvain Gareau, partner with CDP Capital Technology Ventures, of Montreal; Jan Drayer, independent pharmaceutical consultant to Biotechnology Turnaround Fund BV (BTF), of Amsterdam, the Netherlands; and Daan van den Noort, chief investment officer and managing partner of BTF.
The financing was co-led by previous investor Bay City Capital and new investors BTF and CDP Capital Technology Ventures.
Other participants were previous investor Charter Ventures Capital, of Palo Alto, Calf., and new investor KBC, of Brussels, Belgium.
CIBC World Markets Corp., of New York, acted as agent.