Alkermes Finds New Home For Inhaled Drug-Delivery Tech with Civitas Spinout

Xconomy Boston — 

Alkermes’s leased facility in Chelsea, MA has come back to life. Civitas Therapeutics, a spinout of Waltham, MA-based Alkermes (NASDAQ:ALKS), has taken up residency there and renewed efforts to commercialize inhaled drug-delivery technology from Alkermes. The facility in Chelsea was set up years ago to develop and produce inhaled insulin under a pact with Eli Lilly, but it closed after Lilly abruptly pulled its support of the program in March 2008.

Civitas says it has secured $20 million in a Series A round of funding, which is primarily intended to back development of the startup’s technology for treating patients with Parkinson’s disease, says Glenn Batchelder, a founder and CEO of the firm. Longitude Capital and Canaan Partners co-led the financing, and Alkermes has an equity stake in the startup and granted a license to the inhaled drug-delivery technology to Civitas. Alkermes had laid off some 150 workers and ended development of inhaled insulin after its multi-million-dollar deal with Indianapolis-based Lilly (NYSE:LLY) fell through nearly three years ago.

While Civitas is developing the same core technology, it isn’t planning to touch the inhaled insulin market. Inhaled insulin was a huge flop for the pharmaceutical industry in the last decade. And Lilly dropped its partnership with Alkermes after drug giant Pfizer (NYSE:PFE) and Novo Nordisk bailed on products that enabled delivery of insulin through the lungs, as a less-invasive alternative to injections that control blood sugar levels in diabetics. But Batchelder appears to have learned from the inhaled insulin failure.

“As we stepped back and looked at this opportunity,” Batchelder says, “we said we’re going to focus on not just something that is a more convenient route of administration or the best way to deliver something to the lungs, but actually a transformative benefit for patients.”

The firm sees such benefit potential for patients with Parkinson’s. Patients with the neurological disease have trouble moving, especially when typically oral drugs such as L-dopa and other pills fall short on keeping steady levels of a neurotransmitter called dopamine in their system. With an inhaled therapy, Civitas wants to both steady the effectiveness of the existing treatments as well as offer a new quick-acting option against the sudden attacks that stymie their mobility. Inhaled delivery could put a treatment into a patient’s bloodstream quickly, without having to travel through the gut to be metabolized like pills. Parkinson’s can also rob people of their normal capacity to swallow, he says, and that too can be overcome with inhaled delivery.

Batchelder, who was previously chief executive of the Cambridge, MA-based biotech BIND Biosciences, says that he initially started talks with Alkermes CEO Richard Pops in 2009 about ways to renew efforts to commercialize the pulmonary-delivery technology. The founding team of the startup got together in May 2010 after it was decided that a separate firm solely focused on developing the technology was the best way to go.

“I am very pleased to have such a talented and committed group focused on developing these assets,” Pops said in a statement. (I requested an interview with Pops but it didn’t happen, so I did’t get to ask Alkermes’s dynamic chief why he has opted to not develop this technology internally.) “This team is well positioned to leverage this technology platform,” Pops added in the statement.

Civitas’s founding team includes its top scientific advisor, Jim Wright, who was an employee of Alkermes when the biotech acquired the core technology for inhaled dry powder drug delivery in 1999. And Rick Batycky, Civitas’s chief scientist, was an early employee who worked on the inhalation technology at Advanced Inhalation Research (AIR) in the late ’90s, before it was acquired by Alkermes, and then led its development at Alkermes.

Civitas, unlike a typical startup, has gotten started with a technology that has already cleared a number of technical hurdles and has been used to deliver more than a million doses of medicine to patients. Batchelder says that the technology is unique because it can deliver large and precise dosages of medicine, including both protein drugs and small molecules. His startup is focusing on delivering small molecules.

The company isn’t saying which drugs it plans to deliver in the inhaled particles, including in the Parkinson’s program. Yet the firm hopes to begin initial clinical studies in humans in early 2012 for the Parkinson’s treatment and have some validation of that program by the end of the year. If all goes well, the startup is also poised to quickly advance manufacturing its treatment in the facility that was built for producing inhaled insulin in Chelsea.

This could turn out to be an incredible resurrection of a technology, depending on how well Batchelder and his team fare in the coming years. At the very least, Alkermes has found new life for its storied AIR technology.

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