Viamet drops IPO, spins out cancer drug as ex-Elan chief funds $60M round

Kelly Martin

Confronted by an increasingly tough group of biotech investors, Research Triangle Park, NC-based Viamet Pharmaceuticals has scrapped plans for an IPO, instead opting to grab a $60 million venture round to finance its development work on antifungals while spinning out one of its assets into a separate company. And it's working with one of the most controversial figures in biotech to push the company forward.

Brandon Point Industries--founded by ex-Elan CEO Kelly Martin and working with Neil Woodford's high profile investment management group--came in with the cash, joining a syndicate that includes Novartis Venture Fund, Lilly Ventures, Hatteras Venture Partners, Intersouth Partners, Lurie Holdings and Astellas Venture Management.

Biotech companies make up the bulk of companies looking to go public these days. But after a two-year run, analysts are increasingly seeing the top entries do well while lesser-known biotechs like Viamet are either forced to the sidelines or required to accept a deep discount on price. Viamet chose a different route and now Martin is joining the board.

As CEO for Elan, Martin proved to be a lightning rod for activist investors and analysts, frequently angered by his use of private jets and repeated R&D setbacks. A last-ditch attempt to use a windfall from Biogen Idec to fund a deal spree was ultimately rejected by shareholders, who opted for a buyout offer. He reportedly made up to $40 million from the Perrigo acquisition, an early tax inversion deal.

Martin's money will be used to back a Phase IIb study of VT-1161, which launches in the fourth quarter. And another program for cryptococcal meningitis will start next year. "Additionally, this financing will provide resources to advance a new lead series for other invasive fungal infections, while also fully exploiting the power of our Metallophile platform to discover, optimize and develop novel compounds for a multitude of additional therapeutic indications," noted Viamet CEO Robert Schotzinger.

William Moore, the former CSO of Viamet, will now take the helm of Innocrin, which will pursue the mid-stage development work for the prostate cancer drug VT-464, a dual lyase-selective CYP-17 inhibitor and androgen receptor antagonist.

- here's the release

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