San Diego-based Elcelyx Therapeutics said today it has secured $40 million in a Series E financing—its biggest ever—after receiving official guidance from the FDA for late-stage trials of its oral drug candidate, a delayed-release formulation of metformin.
Elcelyx is targeting the 40 percent of patients with type 2 diabetes who can’t tolerate existing formulations of metformin, a first-line drug of choice for most of them.
In an interview with Xconomy earlier this year, Elcelyx CEO Alain Baron laid out three options for funding late-stage clinical trials: raise capital through an IPO; sell Elcelyx to a big pharma; or raise enough funding for Elcelyx to carry out the late-stage trials itself. With today’s announcement, it appears the company is pursuing a low-budget version of option No. 3.
At that time, Baron estimated it would cost $100 million to complete three late-stage studies that would involve a total of 1,500 to 2,000 patients.
In a statement today, Elcelyx said the $40 million it raised from two new investors, Hong Kong’s Sailing Capital and certain funds managed by Boston’s Clough Capital Partners, along with all existing investors, would support the first of those three late-stage studies. Elcelyx, founded in 2010, previously secured about $57 million from Morganthaler Ventures, Kleiner Perkins Caufield & Byers, Technology Partners, and GSM Fund.
Between 7 million and 8 million Americans with type 2 diabetes can’t take standard metformin, either because of adverse side effects that include severe nausea, vomiting, and diarrhea, or because the patients’ impaired kidney function leads to a condition known as metformin-associated lactic acidosis. The delayed-release formulation developed by Elceylx targets the lower bowel, which limits the absorption of metformin into the blood. The company said it provides the benefits of metformin without the systemic exposure-related health risks posed to patients with kidney impairment.
Elcelyx said it already has begun the first study, a phase 2b dose-ranging study designed to document Metformin DR’s potential for use by patients with impaired kidney function or gastrointestinal difficulties. The company plans to enroll about 550 patients in the study.
According to Elcelyx, the trial would likely be followed by two pivotal late-stage studies, one of which would include type 2 diabetes patients with moderate renal impairment. Elcelyx did not indicate how those studies would be funded, however.