Biotech startup Laguna Pharma goes bust on a fast PhIII cardio drug flop

Laguna CEO Bob Baltera

Just 10 months after grabbing a $30 million venture round to create a new company under a veteran biotech crew and slip an obscure atrial fibrillation drug into Phase III, La Jolla, CA-based Laguna Pharmaceuticals is shutting down.

A spokesman for Laguna confirmed a report in Xconomy over the weekend that the company had opted for the quick exit after seeing unspecified safety issues in the Phase III, which launched a couple of months ago. The $30 million was put up by Versant, Frazier, BioMed and Sante. 

The spokesman declined to say how much money was left for redistribution and declined to highlight the safety issues. All 8 staffers have been terminated, he added.

Laguna was created based on mid-stage data for a drug called vanoxerine, with the investors attracted to the safety profile that had been established for the drug as it was being advanced by a company called ChanRx, founded by Arthur "Buzz" Brown, who had initially founded a company called ChanTest.

Bob Baltera, who helmed Amira when it was forced to restructure in a cash crunch and then sold to Bristol-Myers ($BMY) in a $475 million deal in 2011, was not immediately available for comment.

Last fall ChanRx issued a release on vanoxerine, primarily focusing on its mid-stage safety data from a study that enrolled 104 patients. "No episodes of monomorphic or polymorphic ventricular tachycardia were seen," the biotech noted, adding that arrhythmia has been a major safety factor in the field. The FDA requires companies in the field to clear a very high safety bar before they permit marketing of new heart drugs.

The Phase III at Laguna had set out to recruit 600 patients to test the drug, which will likely never be heard of again.