Vascular Pharmaceuticals Lands $9M For Diabetes Drug Trials

Xconomy Raleigh-Durham — 

Patients whose diabetes has progressed to a type of kidney damage called diabetic nephropathy have few treatment options available to them. Some doctors treat the condition with blood pressure medication. But there are no FDA-approved drugs to specifically treat diabetic nephropathy, which can lead to end-stage renal failure. At that stage, patients will likely need dialysis or even a kidney transplant.

Research Triangle Park, NC-based Vascular Pharmaceuticals has developed a drug that, if all goes well, could become the first diabetic nephropathy drug. For now, the company is still trying to prove the concept.

“Our mechanism of action is distinct from anything else,” Richard Shea, CEO of the company, told Xconomy, speaking during a break at the CED Life Sciences conference in Raleigh, NC. “We hope to slow, if not stop, the progression of diabetic nephropathy.”

Vascular Pharma now has some new financing to help the company make the case for its drug, which for now is called VPI-26908. The company said Tuesday that it has raised $9 million in additional financing to continue mid-stage clinical trials of its experimental drug. Lumira Capital led the new financing, joined by an unnamed investor as well as existing investors Intersouth Partners and MPM Capital. The funding expands a 2012 Series A round that provided $16 million for the company.

Vascular Pharmaceuticals

Diabetes affects approximately 29 million people in the United States, according to the National Diabetes Statistics Report. Diabetic nephropathy is a complication of the disease. According to the American Diabetes Association, diabetic nephropathy leads to end-stage renal failure in about 40 percent of cases.

Diabetic nephropathy can be traced to cell receptors in the kidneys functioning abnormally, Shea says. This abnormal function happens in the presence of high blood glucose, which causes the cells to become overactive. Vascular Pharma’s drug, a first-in-class monoclonal antibody, works by binding to a particular target in the receptor that regulates these cells, and in turn, normalizes their function. That’s how the drug worked in animal studies. Vascular Pharma has taken its drug through Phase 1 clinical trials and, last fall, started a Phase 2 study to demonstrate the concept in humans. The randomized, double-blinded, and placebo-controlled study is expected to enroll up to 300 patients.

The Phase 2 trial comes with a built-in exit plan for Vascular Pharma. The company’s initial 2012 financing was accompanied by an agreement with Janssen Biotech, a division of Johnson & Johnson (NYSE: JNJ), granting that company exclusive rights to acquire Vascular Pharma following completion of a Phase 2 study of VPI-2690B. In exchange for those rights, Vascular Pharma received an upfront payment from Janssen and stands to gain additional milestones, the financial details of which were not disclosed.

Janssen has been involved with Vascular Pharma since 2009, when the larger company was a research partner, Shea says. At the end of the research partnership, the two companies reached the agreement to grant Janssen acquisition rights. Janssen continues to be involved as a “collaborative partner,” though Shea declined to specify what role it has in Vascular Pharma’s work.

Vascular Pharma’s technology is based on research licensed from the University of North Carolina at Chapel Hill. It was developed by David Clemmons, a professor of medicine and former chief of the division of endocrinology and metabolism at the UNC Chapel Hill School of Medicine, and Laura Maile, a research collaborator with Clemmons and now director of research and development at the company.