Rhythm banks $25M for mid-stage work on diabetes, obesity drugs

Boston-based Rhythm Pharmaceuticals is picking up the tempo on its R&D work with a fresh, $25 million injection of venture cash from some top-tier venture groups. MPM Capital, New Enterprise Associates and Third Rock Ventures all chipped in on the $25 million round, with some additional help from the French biotech Ipsen--which contributed the company's two metabolic drug programs for the launch. Rhythm has now raised an impressive $65 million in venture funds.

The money is being spent on experimental peptide drugs: The lead program, RM-131--a ghrelin agonist now in Phase II after wrapping a small, positive Phase I trial for diabetic gastroparesis--and the early-stage RM-493, a melanocortin 4 receptor agonist for diabetes and obesity. The money from this round should be enough for the 7-person team operating Rhythm to get both programs through Phase II, says one backer.

"The Phase II (for RM-131) is going to be a much bigger trial with the results not being announced until 2013, and really the key difference here is that in Phase 1B, we saw very impressive gastric emptying," says Lou Tartaglia, a board member at Rhythm and Third Rock's point partner on metabolic drug companies. "What you want to show in (Phase II) are indications that the patients are improving, truly getting better across the broad set of symptom scores."

In the obesity study, Tartaglia says that Rhythm will look for a 10% drop in weight, significantly better than some of the experimental drugs now competing to become the first new obesity drug approved in more than a decade. And Rhythm is planning both a study for "garden variety" obesity as well as a smaller, genetically defined population. 

Rhythm has an interesting pedigree. Company founder and president Bart Henderson has an extensive deal-making background obtained at companies like Radius, Vertex and Ironwood. And Tartaglia is quick to acknowledge that diabetes programs and broadbased obesity efforts are likely to find their way into the hands of a Big Pharma company. 

"As we see obesity drugs doing well and there's a willingness at the FDA to look at obesity drugs as important disease modifiers, we'll see increased pharma interest," notes Tartaglia, who helped launch Ember Therapeutics and sits on the board of Zafgen.

- here's the press release