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After Investing, GSK to Buy Out Celiac Drug Developer Sitari Pharma

Xconomy San Diego — 

GlaxoSmithKline is acquiring a startup it helped launch in 2013 as part of an alliance with life sciences venture capital firm Avalon Ventures.

Avalon said Tuesday that GSK (NYSE: GSK) has agreed to buy the company, Sitari Pharmaceuticals, which has been developing a treatment for celiac disease.

Sitari was the first of eight companies spun up through the partnership between the Southern California investment outfit and British pharma company. As part of the deal, Sitari received $10 million in Series A financing. The company hasn’t raised any additional funds since that initial financing round.

Financial terms of the acquisition were not disclosed.

Startups created through the GSK-Avalon deal have been housed in La Jolla, CA, at Avalon’s COI Pharmaceuticals, a shared workplace for those and other Avalon portfolio companies that provides research and development infrastructure and operational support. Jay Lichter (pictured), the Avalon partner who arranged the alliance, is CEO of COI and of Sitari.

Some 3 million people in the US are afflicted with celiac disease, which occurs when the immune system mistakes fragments of the protein gluten—found in wheat, barley, and rye—for foreign invaders and attacks. The result is damage to the small intestine and problems absorbing nutrients from food, which can cause a range of long-term health issues. There are no FDA-approved treatments for celiac disease. Patients’ only recourse is to strictly avoid gluten.

The San Diego startup has been developing a drug that targets an enzyme, transglutaminase 2 (TG2), that is thought to trigger the inflammatory response to gluten. By blocking TG2, the drug is meant to stop the immune attack and the resulting intestinal damage. The company anticipates the experimental drug could enter human testing in about one year.

Sitari’s acquisition by GSK comes a few months after the failure of a potential vaccine that was being developed by Cambridge, MA company ImmusanT for patients with celiac disease. Arch Venture Partners and Vatera Healthcare Partners pumped $40 million into the company in late 2017 to fund the study, as well as to continue work on developing a complementary diagnostic.

Others are also in the mix. The furthest along, according to the Celiac Disease Foundation, is a drug from Innovate Pharmaceuticals (NASDAQ: INNT) in Phase 3 testing. Behind it are experimental medicines from ImmunogenX, Cour Pharmaceuticals, Amgen (NASDAQ: AMGN), and more.