UPDATED: Aragon raises $42M for closely-watched prostate cancer drug

Now that San Diego-based Aragon Pharmaceuticals has wrapped its early-stage work on their anti-androgen prostate cancer drug ARN-509 with some encouraging indications of its impact on tumors, the biotech has married up with a nontraditional investor to round up $42 million in Series C cash. A group called the Topspin Fund, headed by one-time hedge fund wiz Jim Simons, put up half of the cash, which should get the developer through the crucial proof-of-concept stage and on the way to a potential partnership deal.

For an early-stage drug, ARN-509 has attracted a significant amount of buzz in the biotech field. The treatment was discovered by a team of scientists led by Charles Sawyer, a Howard Hughes Medical Institute investigator who is credited with MDV3100, another prostate cancer treatment that has been heralded as a potential game changer at Medivation ($MDVN). Sawyer sometimes refers to ARN-509 as the "Son of Medivation," and a number of observers have indicated that it could have a blockbuster future if it can survive the clinical trial process.

Aragon needed the capital on a short timeline, CEO Rich Heyman tells FierceBiotech. Investigators were able to transition from a successful Phase I into a Phase II, enrolling about 100 late-stage patients in half the time initially projected.

"The data looks very encouraging," he says, noting that the early-stage numbers indicated a drop in PSA levels among patients--a significant biomarker for the disease.

The cash should last "about 2 years," says the CEO. "It depends on if we decide to partner ARN-509 for the pivotal Phase III study." If they do score a pact, he adds, then Aragon will be able to swiftly shift gears and turn the spotlight on its follow-up program for breast cancer as the partner moves forward on the prostate cancer drug.

Much of the buzz in the field has centered on the potential for combo drugs among various developers, and Aragon is excited about the prospects of a combination study with abiraterone, J&J's ($JNJ) new prostate cancer drug obtained in the Cougar buyout. Combining the two drugs would hit "two focal points of androgen-dependent prostate cancer," something the CEO says would amount to "androgen annihilation."

There's also potential for a tie-up with a PI3 kinase inhibitor, which helped inspire Aragon's decision to ask Carol Gallagher, who helmed Callistoga and its PI3 kinase inhibitor program ahead of its sale to Gilead ($GILD), to sit on the company's board.

Aragon hasn't been the only company pumped about ARN-509's potential. Medivation sees this program as part of the IP package it licensed from UCLA. And Medivation has already claimed ownership. 

"We have filed a lawsuit against UCLA because we believe Medivation has exclusive license rights to ARN-509 under the exclusive license agreement and sponsored research agreements between us and the academic institution," Medivation noted in a statement to FierceBiotech today. "The lawsuit alleges that ARN-509 is a close analog of MDV3100, and was invented in the same laboratory at the academic institution from which we licensed MDV3100. The purpose of this lawsuit is to fully enforce Medivation's rights under these agreements. The lawsuit does not affect our intellectual property rights in MDV3100; only our alleged exclusive license rights to ARN-509 is at issue. This lawsuit is pending in the California Superior Court. Discovery is ongoing."

- here's the release from Aragon