Vascular Pharmaceuticals has nailed down $16 million in a Series A round of financing while revealing a deal that gives a unit of Johnson & Johnson ($JNJ) an option to acquire the biotech, the company announced Wednesday. The injection of capital fuels the University of North Carolina (UNC) spinoff's efforts to advance its lead experimental drug to initial human studies as a new treatment for diabetic kidney disease.
Intersouth Partners and MPM Capital co-led the first-round financing and each VC firm has stationed one of its own on the biotech's board of directors. Vascular Pharma will also collect an unspecified upfront fee from J&J's Janssen Biotech as part of the option deal, which gives Janssen the exclusive right to acquire the startup after the developer gets mid-stage trial results on its lead drug, a monoclonal antibody dubbed VPI-2690B.
Chapel Hill, NC-based Vascular Pharma, founded in 2005, plans to file for approval of an investigational new drug (IND) application in the second half of 2013, the startup's CEO, Richard Shea, tells FierceBiotech. The experimental antibody, which targets the alpha-V beta-3 receptor, showed in preclinical studies that it could stymie complications of diabetes such as nephropathy, atherosclerosis and retinopathy, according to the company's release. Two researchers from UNC's Chapel Hill School of Medicine--David Clemmons and Laura Maile--discovered the drug and have studied its effects in preclinical experiments.
"The complications arising from diabetes contribute to significant morbidity and mortality in that population," Shea said in an interview. In his company's release, he noted that nearly 50,000 diabetics in the U.S. end up on dialysis every year as a result of diabetic nephropathy, a leading cause of chronic kidney disease.
Shea says that the funding from the Series A round is expected to fuel his company, which has four full-time employees and uses a constellation of contractors, through mid-stage development of its antibody drug. Like a lot of small biotechs, Vascular Pharma is staking its future on the success of a single drug, developing the asset as long as it must to trigger a buyout.
- here's the release
ALSO: Durham, NC-based Argos Therapeutics, meanwhile, reported to the SEC that it raised an additional $16 million as well. The biotech recently nailed an SPA for a late-stage study of AGS-003, a new kidney cancer therapy. Investigators were scheduled to begin the study in the second half of this year. Filing