Cirius Therapeutics Raises $40M to Expand Ongoing Liver Study

Xconomy San Diego — 

A $40 million transfusion led by Frazier Healthcare Partners and Denmark’s Novo A/S is bringing fresh life to a Michigan biotech working to advance a new experimental drug for treating a type of non-alcoholic fatty liver disease.

As part of the financing, Kalamazoo-based Octeta Therapeutics has been rechristened Cirius Therapeutics, and three San Diego-based biotech executives are stepping into key executive roles. All three were former Laguna Pharmaceuticals executives who spent the past 16 months scouting for Frazier as entrepreneurs-in-residence.

In a statement today, Cirius named Bob Baltera as CEO, Howard Dittrich as chief medical officer (who will be overseeing clinical trial management), and Brian Farmer as chief business officer. All three will be based in San Diego.

Jerry Colca, who was the scientific founder of Octeta and its predecessor company, will continue to oversee Cirius’ R&D in Kalamazoo. (Colca was previously a scientist at Kalamazoo-based Upjohn, which merged with Sweden’s Pharmacia AB in 1995. What remains of that business in Kalamazoo is now owned by Pfizer.)

Baltera said by phone yesterday that the Cirius deal represents the culmination of a quest that began for him in early 2016, after Frazier formed San Diego-based Hawkeye as a “search company” focused on in-licensing and developing promising drug candidates.

“We’re still entrepreneurs-in-residence at Frazier, but we’re 100-percent focused on this,” Baltera explained. “We’re going to keep our EIR-slash-Hawkeye badges in the desk drawer.”

The Frazier team will be taking over a phase 2b study that began last year with the goal of enrolling about 200 patients with non-alcoholic steatohepatitis (NASH) and liver fibrosis. The new team plans to increase patient enrollment to about 300 or 350, and perhaps conduct additional analyses through 2018, Baltera said.

“This is more than a classical phase 2B proof-of-concept study,” Baltera said. “We want to make sure we get a full efficacy [and safety] readout here, but also to be sure we understand what happens at different dosage levels.”

The experimental drug candidate under investigation, MSDC-0602K, is what Baltera described as “a next-generation insulin sensitizer,” intended to make NASH patients more responsive to insulin therapy.

“Most NASH patients are Type 2 diabetics with insulin resistance; that’s where our drug comes in,” Baltera said. Cirius describes the MSDC-0602K as an oral, once-daily compound “that avoids safety liabilities known with first-generation approaches.”

About 16 million Americans suffer from NASH, a progressive form of liver disease in which a buildup of fat in the liver causes inflammation and damage to liver cells that may interfere with how the liver works. The disease can rapidly progress to cirrhosis and liver cancer.

In its statement today, Cirius said Colca was involved in the early development of the drug pioglitazone, a first-generation insulin sensitizer. Colca “has conducted decades of research into discovering next-generation approaches for overcoming insulin resistance. MSDC-0602K resulted from Dr. Colca’s efforts to identify new insulin sensitizers with an improved safety profile compared to previous insulin sensitizers,” the company said.

To begin the phase 2b study, Octeta and a predecessor company had raised about $16 million in Series A funding, Baltera said. The new $40 million, described as a Series A-2 financing, was joined by two new investors, Adams Street Partners and Renaissance Venture Capital Fund, along with existing investors that include Hopen Life Sciences Ventures.