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Flexion banks $20M VC round, shifts focus to late-stage osteoarthritis drugs

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Five years after a small team of development vets set up Flexion Therapeutics to show the rest of the industry just what fast and efficient early-stage drug development work should look like, they've landed a $20 million B round from some A-list investors and say they're ready to follow through on another big leg of a new development course. Instead of taking assets to proof-of-concept in a fast march through the clinic and then striking deals for their programs, as originally planned, Flexion's top execs have seized on the success of their clinical-stage osteoarthritis drugs and plan to stay focused on their pipeline--pursuing late-stage work, perhaps all the way through Phase III.

Michael Clayman and Neil Bodick--two Eli Lilly ($LLY) veterans who helped fashion Chorus' reputation for swift development work--were the primary movers and shakers to lead the Woburn, MA-based biotech. Last May the biotech reported that its first Phase II study demonstrated that FX005--a long-acting osteoarthritis drug which is injected directly into joints--hit its primary endpoint on pain relief and function among osteoarthritis patients. They believe another program for a sustained-released steroid has a very good shot at success. And with fresh support from their venture group--with new investor Novo Ventures leading the way--Clayman says there's a "real possibility we could take these all the way to the market."

"In a sense we've changed the end game for ourselves," Clayman adds to FierceBiotech. "It's the right thing for us as a company, to bring therapies which are meaningful to patients and satisfy the needs of investors. It's also a lot easier story to tell to the world." Flexion's fresh $20M VC take comes on top of the $55 million it has already banked. Flexion's existing investors, 5AM Ventures, Pfizer Venture Investments, Sofinnova Partners and Versant Ventures, also participated in the financing.

The top-line data for FX005, a sustained-release p38 MAP kinase inhibitor, demonstrated "prolonged improvement in joint pain and function throughout the 12-week duration of the Phase II study. FX006, an intra-articular sustained release steroid, is currently being evaluated in a Phase IIb dose ranging study and a pharmacokinetic/pharmacodynamics study. FX007, an intra-articular sustained release TrkA inhibitor is being developed to safely address the intractable pain associated with end-stage osteoarthritis."  

After the Phase IIb study is wrapped, Flexion has a number of options on the table, provided the results are positive. Partnering or new financing is possible, says Clayman. Even an IPO could happen, if the markets look receptive. In the meantime, the virtual Flexion plans to grow a bit, adding a "handful" of staffers to its roster of 11 employees. 

But don't look for any big expansion. Notes Clayman: "We're adhering to the general principles of the virtual model."

- here's the press release

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