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UPDATED: Cebix gains $31M, new CEO as it preps for PhIIb diabetes study

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A startup biotech based in La Jolla, CA, has nailed a $30.9 million B round, recruited an experienced hand as CEO and rolled out some encouraging early-stage data on its lead drug for a common symptom of diabetes as it preps for a Phase IIb trial.

Cebix was started a few years ago, pushing a once-weekly, self-injected C-peptide therapy into a human study for peripheral neuropathy, an affliction shared by up to 70% of all patients with Type I diabetes. The biotech said it harvested the safety and pharmacokinetic data it was looking for in the I/II study and plans to study the effect of Ersatta in a 240-patient Phase IIb on a number of symptoms, including vibration sensation, neurological status, erectile dysfunction and quality of life, as well as symptoms and markers of nephropathy. Cebix's big idea is that supplying the C-peptide hormone absent in diabetics can ameliorate neuropathy in a huge patient population.

The biotech will be journeying into mid-stage work under the direction of newly-named CEO Dr. Joel Martin, a former partner at Forward Ventures who helmed Altair Therapeutics, an Isis ($ISIS) spinout which foundered after its mid-stage asthma study flopped two years ago. Martin was also co-founder and CEO of Quantum Dot Corporation, which was acquired by Life Technologies ($LIFE).

The company's C-peptide technology is based on the work of Swedish research John Wahren, Martin tells FierceBiotech. It was Wahren who initially studied the effect of native C peptide, which was then pegylated and turned into an effective medicine. The plan now is to shoot for interim data in early 2014, while continuing talks with potential partners, or perhaps a buyer for the program. Martin also notes that there are currently no approved disease-modifying therapeutics for diabetic peripheral neuropathy.

"We're in no particular hurry to get a deal done," says Martin, who expects the value of the program to rise as the Phase IIb trial progresses. At this point the goal is to keep the company lean and mean, perhaps adding just one or two staffers to the 8-member virtual team as it ramps up the IIb trial in three countries and 30 sites.

InterWest, Sofinnova Ventures and Thomas, McNerney & Partners all participated in the B round. Xconomy reported in 2010 that the biotech had raised $16 million. There's no word on the fate of former CEO James Callaway. Martin says he had left the company by the time he came on and declined comment on the reason for the departure.

- here's the press release

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Cebix raises $16M