When Allergan paid $560 million upfront to acquire a pair of lead NMDA depression drug assets in the Naurex acquisition last summer, the acquirer had no problem leaving the platform in one piece for the company founders to carry on with. And on Tuesday the Evanston, IL-based successor, now dubbed Aptinyx, revealed a hefty $65 million venture round that will be used to write its next research chapter.
“I think it’s fair to say that Allergan is very much a later-stage development organization,” Aptinyx CEO Norbert Riedel tells me. “In that sense it was a great match, and allowed for the rest of it to be spun out.”
Aptinyx will stay directly engaged in what it knows best: NMDA modulation, but not for depression. Instead, by design, the startup will switch focus to diseases like neuropathic pain, Parkinson’s disease and PTSD. And Riedel believes that the new venture syndicate he brought together is perfectly attuned to the plan, as the biotech ramps up Phase I programs in July/August with enough cash on hand to score proof-of-concept data on a few mid-stage studies.
Most of the old Naurex team switched over to the new endeavor in the process, says the CEO, who is happy to note that he has brought together a group of venture backers willing and able to go the distance with a novel CNS company like Aptinyx. And realistically, he added, a spinout was the only way to rationally engineer a buyout deal with Allergan. There would have been no rational way to provide a sufficient valuation for the company’s preclinical assets, says Riedel.
The venture team now backing the company could appreciate the assets, he adds, setting up the big A round.
New Leaf Venture Partners led the round, which included Frazier Healthcare Partners, Longitude Capital and Osage University Partners as new investors. Existing investors, which provided seed capital when Aptinyx spun out of the Naurex deal, include Adams Street Partners, LVP Life Science Ventures, PathoCapital, Goudy Park Capital, Beecken Petty O’Keefe & Company and Northwestern University.
Riedel gets three prominent new board members: Dr. Liam Ratcliffe, managing director of New Leaf Venture Partners; Dr. Jamie Topper, managing general partner of Frazier Healthcare Partners; and Patrick Enright, founder and managing director of Longitude Capital.
Riedel adds that he was delighted to see the results of a recent NIH study of ketamine that showed a metabolite of the drug appears to be responsible for activating an unexpected pathway in order to deliver treatment for severe depression. NMDA modulation is responsible for a whole cascade of activities, including that pathway activation, he notes. And there’s no reason at all to believe that the latest insights will interfere with his current plans.
Naurex had been contributing to a class of NMDA therapeutics that has fascinated academics and industry insiders alike for years. Investigators have repeatedly found that when you use ketamine on patients, many experience an almost instantaneous lifting of even the most severe types of symptoms of depression and bipolar disease. But the drug, often abused in party circles under the name Special K, is also known for only a transitory effect with a host of side effects.
A number of developers--including Johnson & Johnson ($JNJ)--have taken a shot at developing new NMDA drugs, but Naurex distinguished itself with a lead therapy that demonstrated quick action and a durable effect in a Phase IIb study. Company execs say that was the result of designing an NMDA modulator that was calibrated to give just the right tweak to the system.
Investigators gave GLYX-13 to 386 people who had failed to respond to other drugs and continued until a clinical response was seen, which happened in 53% of patients. More than two-thirds of patients relapsed within two weeks and were put on a weekly dose of either GLYX-13 or placebo. The one-third of people who were slower to relapse started a biweekly dosing schedule. Almost half of people who received biweekly doses of GLYX-13 were in remission--as defined by the HDRS scale--at the end of 6 weeks of treatment. Across the whole trial population, GLYX-13 outperformed placebo.
Now Aptinyx is looking to prove that it has the right kind of tech to deliver similar efficacy for other indications.