Elcelyx raises $40M to push its reinvented diabetes drug to Phase III

Elcelyx Therapeutics, developing a long-acting formulation of the old diabetes treatment metformin, closed a $40 million funding round to advance its lead therapy toward pivotal trials.

Metformin, introduced more than 50 years ago, is considered the most widely prescribed diabetes treatment in the world, recommended by the American Diabetes Association as a first option for patients with Type 2 of the disease. But despite metformin's ubiquity and efficacy, about 40% of Type 2 diabetics don't take it, according to Elcelyx, often because of contraindications or tolerability problems.

With those patients in mind, the company has crafted a delayed-release formulation of the drug, designed to similarly improve blood sugar levels but limit how much drug gets into the bloodstream, ideally avoiding the risks of old metformin without sacrificing its benefits. That's particularly important for diabetics with renal impairment and gastrointestinal issues, which are the two most common contraindications for generic metformin, the company said.

Elcelyx's oral treatment, dubbed Metformin DR, is now in a Phase IIb trial, enrolling roughly 550 patients to find the ideal dose for a pair of Phase III studies planned thereafter. The company's $40 million round, led by well-heeled Hong Kong private equity firm Sailing Capital, will pay Metformin DR's way forward, the company said.

Joining Sailing is fellow new investor Clough Capital Partners, plus previous backers Morgenthaler Ventures, Kleiner Perkins Caufield & Byers, Technology Partners and GSM Fund.

Metformin DR, formerly NewMet, has shown promise in midstage trials, charting similar reductions in blood glucose as generic metformin but reducing exposure by as 65%.

- read the statement

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