Austin—Lung Therapeutics has closed a $14.3 million round of investment that the Austin, TX-based company will use to continue a clinical trial testing its lead drug, a treatment for potentially lethal complications of pneumonia.
Bios Partners, a Fort Worth, TX-based private equity firm, led the Series B round of investment. Earlier investor UT Horizon Fund also participated in the latest financing.
Lung Therapeutics developed its lead drug, LTI-01, to treat empyema, a buildup of pus in the space between the lungs and the inner surface of the chest wall. The condition often develops after pneumonia and can be treated with antibiotics to address the underlying infection. The fluid buildup can also lead to a complicated parapneumonic effusion, which requires a tube to be inserted into the chest to drain the fluid.
Lung Therapeutics says its injectable drug reduces the scars formed by fibrin, a protein involved in the blood clotting that can also create tiny pockets in the lungs for fluid to fill. According to the company. reducing this scarring allows the fluid to drain and avoids the need for surgery.
The Lung Therapeutics drug has received orphan drug designation from the FDA, a status reserved for drugs being developed to treat rare conditions that affect fewer than 200,000 people in the U.S. Orphan drug designation grants Lung Therapeutics seven years of marketing exclusivity and tax credits—but only if the drug is approved. The drug was licensed from the University of Texas Health Science Center at Tyler. In March, Lung Therapeutics began a Phase 1a/b clinical trial in Australia and New Zealand.
Lung Therapeutics says the financing will also support another drug candidate, LTI-03. The company is developing this compound as a potential treatment for idiopathic pulmonary fibrosis, a chronic lung disease in which lung tissue becomes thick and stiff over time. This scarring makes it harder for the lungs to move oxygen into the bloodstream. Those diagnosed with the condition, typically adults middle-aged and older, typically live between three and five years after diagnosis, according to the National Institutes of Health.
Lung Therapeutics says it has raised a total of $17 million in institutional investment. The company has also received $27 million in non-dilutive funding that supported the research and development of both of its drug candidates.