Promethera boosts Series C to €26M to join NASH race

microscope image of nash
Micrograph of nonalcoholic fatty liver disease

Promethera Biosciences has added to its Series C to support its expansion into major liver diseases including nonalcoholic steatohepatitis (NASH). The additional funding moves Promethera toward its goal of getting a stem cell NASH candidate into the clinic in the second half of next year.

Mont-Saint-Guibert, Belgium-based Promethera has pulled in €10 million ($11 million), €6 million of which is new, €4 million of which is part of the €20 million it raised in 2014. The money gives the liver-derived progenitor cell therapy specialist the means to continue expanding its pipeline beyond its early focus on rare diseases.

A program targeting acute-on-chronic liver failure (ACLF)--a recently defined, frequently fatal liver disease--is due to enter a safety study in humans by the end of the year. That clinical trial will mark the start of the expansion of Promethera’s pipeline beyond rare diseases and into larger markets.

“This will be a door opener to the next stage of our development, focusing on NASH,” Promethera CEO John Tchelingerian said.

In expanding into larger markets, Promethera is switching from local liver administration to systemic delivery. The shift is intended to make the treatment less arduous for patients. "We have enough background data to think that this will be the best way to go in NASH,” Tchelingerian said.

Promethera is currently adding to its NASH data through research in preclinical models. The goal is to have enough data to officially enter the NASH race in January. And then get into the clinic in the back half of the year. Promethera is also working on a fibrosis program.

The scale of Promethera’s ambitions have ramped up under the leadership of Tchelingerian, who sees the company’s allogeneic human adult liver-derived progenitor cells as a good fit for a range of major indications. Promethera takes cells from donor livers for processing and administration into patients. Cell therapies have a patchy track record, but Tchelingerian thinks Promethera can succeed where others have stumbled.

“These cells have specific features that are very amenable to liver disorders,” Tchelingerian said. This, as Tchelingerian sees it, is one of the things that differentiates Promethera from companies working on stem cells from sources such as bone marrow. Whereas bone marrow yields “generic” stem cells, Promethera deals with stem cells “specialized for liver disorders,” Tchelingerian said.

Raising money

The move from rare diseases to major indications is changing Promethera’s financing requirements. That was one reason for the extension. The other is illustrated by the identities of the new investors.

Mitsubishi UFJ Capital, Cell Innovation Partners and LifeLiver came on board for the Series C extension, strengthening Promethera’s financial and strategic ties to Japan and South Korea. The prevalence of liver disorders and favorable cell therapy regulations in parts of Asia, notably Japan, make the region a notable opportunity for Promethera. With 13% of Promethera’s shares held in Asia, the makeup of its investor base reflects this opportunity.

Existing investors including Boehringer Ingelheim Venture Fund also contributed to the extension, but the funding will only take Promethera so far.

Tchelingerian recognizes the race is on for the NASH market. Companies such as Allergan ($AGN), Bristol-Myers Squibb ($BMY), Genfit (EPA:GNFT), Gilead ($GILD) and Intercept ($ICPT) are already deep into the clinic. To compete in this larger, more competitive indication, Promethera will need more than an additional €10 million.

"We need to get additional financing,” Tchelingerian said.

Promethera plans to raise €30 million to €40 million through an IPO in Belgium in the first half of next year, although Tchelingerian is “not excluding other opportunities, other options.” The goal is to get enough money to put together a package of clinical proof-of-concept data that is strong enough to support serious talks with Big Pharma companies.

If Promethera can do that, the competitiveness of the NASH sector would be more of a boon than a barrier.