Israeli-American biotech Chiasma has raised $70 million in Series E cash, moving on from an aborted collaboration with Roche ($RHHBY) and rolling toward FDA approval with a treatment for the hormone disorder acromegaly.
With the money, Chiasma plans to file an FDA application for oral octreotide, a treatment for the rare disorder. The company expects to submit the drug next quarter and, if everything goes according to plan, launch it soon thereafter, using its latest fundraise to assemble a marketing team.
Back in early 2013, Roche partnered up with Chiasma in a deal worth up to $595 million to get its hands on oral octreotide, but the agreement fell apart just after pivotal trials, with Roche COO Daniel O'Day saying his company based its decision on "some additional Phase III data" and "regulatory interactions." That left Chiasma with just a $65 million upfront fee and undisclosed fraction of Roche's promised milestone payments, forcing the biotech back to the well with its lead drug.
Previous investors MPM Capital, F2 Capital, 7 Med Health Ventures, Abingworth and Arch Venture Partners answered the call, pitching in on the latest round alongside new backers Rock Springs Capital and Sofinnova Ventures. And now Chiasma has the funds it needs to push the top prospect forward and advance new candidates using its bioavailability-boosting Transient Permeability Enhancer (TPE) technology.
|Chiasma CEO Roni Mamluk|
"The commitment from both new and existing investors provide us with the resources to advance our regulatory efforts, prepare for a successful launch of octreotide capsules, test oral octreotide capsules for additional indications and further invest in earlier-stage TPE programs that can fuel our growth over the long term," Chiasma CEO Roni Mamluk said in a statement. "With this financing in place, we are well positioned to advance a portfolio of oral drugs that address unmet needs in orphan indications."
The drug has the same active ingredient as Novartis' ($NVS) blockbuster Sandostatin, a now-off-patent injectable used in various rare diseases. If approved, it would be the first and only oral somatostatin analog available anywhere in the world, according to Chiasma.
Meanwhile, Novartis is working to tighten its hold on the market. In December, the company won FDA approval for a once-a-month formulation of Signifor to treat acromegaly, hoping to replace lost Sandostatin sales.
- read the statement