A venture capital trio is bankrolling a new biotech startup's early-stage clinical work, staking the founders with a $32 million Series A after Novartis ($NVS) agreed to pick up an option to buy the company for $300 million.
Sideris Pharmaceuticals, which has a foothold in Boston and Gainesville, FL, is working on an iron-chelating drug candidate dubbed SP-420. MPM Capital, including MPM's SunStates Fund, led the round with Hatteras Venture Partners and Osage University Partners chipping in.
SP-420 was outlicensed from the University of Florida. It's described as an oral drug that binds to iron and flushes it out of the body. And the VCs' cash will get the treatment through a mid-stage study, when Novartis can size up its value better.
Novartis has picked up a number of options on experimental drugs over the years. But the package deal reflects a new trend in venture financing, in which venture groups look for a Big Pharma to agree on a future buyout provided they can gather convincing proof-of-concept data on a promising treatment. These kinds of low-cost, asset-based companies have become a popular development vehicle.
"The novel iron chelator SP-420 articulates our best efforts in drug discovery and development for transfusional iron overload diseases. We are very enthusiastic that the Sideris team will be moving this forward and equally excited for the patients. I will always remain indebted to the National Institute of Diabetes and Digestive and Kidney Diseases, to the University of Florida, and to my coworkers for their tireless efforts over the years," said Prof. Raymond Bergeron, Sideris' founder and a distinguished professor emeritus at the University of Florida.
"We believe that SP-420 has the potential to be the best-in-class therapeutic approach for the treatment of transfusion-related iron overload," stated Thomas Neenan, Sideris founder and chief technology officer.
- here's the press release