In early 2013, Roche ($RHHBY) signed a $595 million deal with Israel's Chiasma with eyes on its promising treatment for the hormone disorder acromegaly. But the Swiss drugmaker got cold feet over the summer, and now Chiasma is picking up the pieces, raising cash in hopes of submitting its drug to regulators this year.
As MedCity News notes, the Jerusalem-headquartered company has pulled in $33.8 million of a planned $56.3 million round. The funds will support Chiasma's goal-line work on oral octreotide, a treatment for the rare acromegaly that completed Phase III development last year.
The Roche deal fell apart just after its partner wrapped up pivotal trials, and COO Daniel O'Day said his company based its decision on "some additional Phase III data plus some regulatory interactions in the second quarter," declining to go any further. Chiasma CEO Roni Mamluk, speaking to Israel's Globes in August, said octreotide's Phase III results were "excellent" and that Roche's decision reflects its unwillingness to dive into endocrinology, not a problem with the acromegaly treatment.
The early termination left Chiasma with just a $65 million upfront fee and undisclosed fraction of Roche's promised milestone payments. Now the biotech is back on the fundraising trail to complete the project.
First, Chiasma is preparing an FDA application, hoping to secure approval this year. From there, Mamluk has said, the company is keeping its ears open to potential partnerships but believes it can launch octreotide on its own if need be. Acromegaly's rarity means only a few doctors work in the field, according to Chiasma, and a small sales staff should be able to get the drug off the ground.
The company's investor syndicate includes Abingworth, MPM Capital and Arch Venture Partners.
Meanwhile, Novartis ($NVS), long a leader in the space, has tightened its hold on the market. Last month, the company won FDA approval for a once-a-month formulation of Signifor to treat acromegaly. That drug, already approved for Cushing's disease, will take the mantle from Novartis' own Sandostatin, a blockbuster injectable for acromegaly that came off patent in the U.S. this year.