Fidelity backs rare disease startup with $48M to get pivotal data

Money

Specialty pharma spinout Castle Creek Pharmaceuticals has raised its first institutional round of $48 million entirely from active biotech crossover investor Fidelity Management and Research Company. Founded last year, the company has in-licensed a series of dermatology as well as ear, nose and throat (ENT) candidates specifically for rare diseases with limited therapeutic options.

The New Jersey-based biotech comes out of Marathon Pharmaceuticals; it was founded by Michael Derby, who founded Norphan Pharmaceuticals that was acquired by Marathon in 2013, and Jeffrey Aronin, who is the CEO of Marathon and previously founded Ovation Pharmaceuticals, which sold to Lundbeck in 2009.

“We were initially focused on a variety of rare diseases, but that evolved into specialty dermatology and head and neck space,” Castle Creek CEO Michael Derby told FierceBiotech. “These proceeds are really being used to complete development work. For most of the product opportunities that we target, we expect to complete development and get to market in two to three years. That’s definitely true for our lead candidate.”

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Castle Creek’s lead candidate is topical CCP-020 (diacerein 1% ointment) to treat epidermolysis bullosa simplex (EBS), a common form of the rare condition epidermolysis bullosa in which a genetic defect makes the skin fragile and prone to blistering. There aren’t any approved treatment options.

CCP-020 is thought to block an inflammatory signaling pathway in EBS. The startup plans a registration trial in this indication that’s slated to start late this year.

The company recently reported Phase II data for CCP-020 from 17 EBS patients in a randomized, placebo-controlled trial in patients aged 4 to 12. Sixty percent of the patients in the treatment arm achieved the primary endpoint of 40% reduction in the number of blisters on the treated skin area at four weeks. That’s compared to a 15% rate for placebo. The benefit continued even after treatment cessation through a follow-up period of 12 weeks.

CCP-020 was in-licensed by Castle Creek from Taiwanese company TWi Pharmaceuticals in December of last year. The specialty pharma gained worldwide rights to the candidate, excluding Asia but including Australia and New Zealand. Financial details of the deal weren’t disclosed. The candidate already has orphan drug designation with the FDA.