Galileo Pharmaceuticals Inc. is using a $31 million boost from a preferred stock offering to advance business and drug development efforts.
The Santa Clara, Calif.-based company, which is focused on targeting redox-signaling pathways, said the funding would support its transition from discovery to development. More specifically, Galileo plans to apply the money primarily toward developing both its internal neuroinflammatory disease program and its partnered inflammatory disease program.
"In these times, it's like grabbing a life raft in the middle of the ocean," Galileo Chairman and CEO Guy Miller told BioWorld Today. "From a technical side, I think investors were enthusiastic that Galileo is a product-focused company looking to develop therapeutics using an integrated phenotypic chemical diversity strategy about a largely overlooked area that is emerging as very important."
Noting that redox-signaling defects are implicated in inflammatory, autoimmune, metabolic and ischemic disease mechanisms, he also pointed to investor interest as external validation. Miller said the company has generated positive data from an ongoing development collaboration with an unnamed pharmaceutical partner focused on the inflammatory arena. Galileo's compounds exceeded the partner's internal parameters when tested against its preclinical assays, leading to a broader deal going forward.
Since the privately held company's 1998 inception, Galileo has raised about $77 million through three rounds of seed financing and four institutional rounds, including the latest. Miller said the most recent funding should last between 30 and 36 months.
Though he labeled the financing a down round based on current market conditions, he said Galileo and its prior investors expect to make up ground given future upside at the company. Galileo said its ChemibioLogics platform helps identify therapeutics targeting redox-signaling pathways, through which it has built a pipeline of redox pharmacology leads. Redox failure occurs when a cell's ability to use and store energy is destroyed.
Among Galileo's chief attributes is its neuroinflammatory disease program. Miller said Galileo would apply a portion of the financing to the program, from which the company expects to produce treatments for Alzheimer's disease and Parkinson's disease, stroke and multiple sclerosis, as well as central and peripheral nervous system trauma.
He said Galileo would move forward with a small Phase I/II study in one undisclosed neuroinflammatory condition on its own, but look to partner out other indications.
Galileo also expects to apply funding toward its inflammatory disease partnership, from which it expects to see milestones and royalties within two to three years.
Initially called Galileo Laboratories Inc., the company worked in nutrition, dermatology and diabetes before concentrating in the neuroinflammatory area. To extract value from its early work outside its internal focus, Galileo has partnered some programs and is seeking collaborators involved in redox-based pharmacology for diseases such as osteoarthritis, rheumatoid arthritis, inflammatory bowel disease and macular degeneration.
"The company has a very sound business model that will allow it to risk-adjust as market conditions change," he said, explaining that Galileo could buck the trend of partnerships focused solely around late-stage clinical compounds. "The Galileo pipeline is so substantial in terms of novel chemistry for a variety of unmet chemical needs that it will develop some candidates internally but strike deals that significantly defray the investor risk in terms of burn rate while allowing the company to move its own programs forward."
Miller said the company also plans to use a portion of the funding to further develop its ChemibioLogics platform.
Investors included initial lead investor Alloy Ventures, of Palo Alto, Calif.; Adams Street Partners, of Chicago; Bay City Capital, of San Francisco; Bay City's North American Nutrition and Agribusiness Fund; Johnson & Johnson Development Corp., a unit of New Brunswick, N.J.-based Johnson & Johnson; Inventages Venture Capital of Nestle SA, of Vevey, Switzerland; Novartis BioVenture Fund, of Basel, Switzerland; and the Biomedical Sciences Investment Fund of the Singapore Economic Development Board.