Cebix hangs it up after raising $50M for diabetes drug

La Jolla, CA's Cebix has quietly closed up shop, Xconomy reports, after its once-promising diabetes candidate failed to hit the mark in Phase IIb.

Last anyone heard from Cebix, it was powering into a mid-stage test of Ersatta, which is an analog of the body's natural C peptide hormone designed to combat loss of nerve function tied to Type 1 diabetes. The drug performed well in a Phase I/II bridge study, and, in 2012, Cebix embarked on a 250-patient Phase IIb efficacy trial to test how well Ersatta could improve nerve function compared to placebo, according to

That study wrapped up in December, and Cebix concluded that "Ersatta and placebo were, alas, indistinguishable," CEO Joel Martin told Xconomy. Seeing little reason to press on, the company promptly disbanded, winding down in its operations in about 30 days, Martin said.

Cebix had raised nearly $50 million on its way into the failed Phase IIb, drawing the support of InterWest, Sofinnova Ventures and Thomas, McNerney & Partners. And, counting on Ersatta's success, last year the company started putting together a $35 million new round to pay its way toward late-stage studies, according to an SEC filing.

Instead, Martin and his team are now out scouting for new startup opportunities, he said.

Targeting C peptide to treat diabetes has something of a checkered clinical history. Tolerx, alongside partner GlaxoSmithKline ($GSK), developed an antibody designed to boost levels of the hormone but bombed out in Phase III, and the biotech met a fate similar to Cebix's in 2011. And teplizumab, another antibody crafted to preserve C peptide, came up short for Eli Lilly ($LLY) in a Phase III study, but its biotech partner, MacroGenics ($MGNX), has since revived the program and found some success in early-stage diabetics.

- read the Xconomy story