The people who made a bundle off a company called Ilypsa may just have found a hit in their second act. Santa Clara, CA-based Relypsa said today it has nailed down $70 million in a Series B round of venture financing to pursue a new drug that tamps down excessive potassium in the blood.
OrbiMed Advisors led the round, which included existing Relypsa investors New Leaf Venture Partners, 5AM Ventures, Delphi Ventures, Sprout Group, and Mediphase Venture Partners. As part of the deal, OrbiMed’s Jonathan Silverman will join the Relypsa board, along with Thomas Schuetz, who will replace Jay Shepard.
Relypsa plans to use the cash to push its lead compound, RLY5016, through the final stage of clinical trials needed for FDA approval. The drug is designed to soak up excessive amounts of potassium in the bloodstream, without getting absorbed into the body itself, to treat a condition known as hyperkalemia. The disease is most commonly found in patients with malfunctioning kidneys, high blood pressure, diabetes, and heart failure. Hyperkalemia often has no symptoms, but sometimes people with the disorder experience irregular heartbeat, nausea, and slow or weak heart rates, according to the National Institutes of Health. Since the experimental drug isn’t absorbed into the bloodstream, the thinking goes, it should be able to get rid of the excess potassium without causing significant side effects. The Relypsa drug is supposed to stay in the gastrointestinal tract, do its job, and be excreted through the digestive system.
Relypsa didn’t say how big a market opportunity it sees in the treatment of hyperkalemia, although its management team is quite familiar with complications of kidney disease and the physicians who treat it. The company is led by president Gerrit Klaerner and chief scientist Jerry Buysse, who were part of the group at Santa Clara-based Ilypsa, which was acquired by Amgen (NASDAQ: AMGN) for $420 million in cash in 2007. Ilypsa had been developing a drug to soak up excess phosphorus in the blood, another complication that patients get when their kidneys aren’t working properly. That’s of clear interest to Amgen, which made its name by treating anemia, another big complication that’s common in kidney patients.
With the new cash in hand, Relypsa said it plans to start a pivotal phase clinical trial program for its lead drug in the first half of 2011. Since Relypsa was founded right after the sale of Ilypsa in 2007, the company took only about three years to go from animal tests to the cusp of Phase III clinical trials. That’s uncommonly fast in the drug development business, and apparently was one big reason why the VCs bestowed so much loot on the company.
Vijay Lathi, managing partner at New Leaf, said the Relypsa team’s speedy path through development far exceeded the investors’ expectations. “On behalf of Relypsa’s founding investors, we are delighted to participate in this round to continue building a company around a technology platform and a late stage asset that represents a significant opportunity in the cardio-renal area,” he said in a statement.
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