UPDATED: Johnson & Johnson backs biotech startup Protagonist in $14M financing

Protagonist Therapeutics has found another major corporate investor to support its pursuit of new peptide drugs. Johnson & Johnson Development Corporation, a unit of J&J ($JNJ), led the Menlo Park, CA-based biotech group's $14 million Series B financing, and Eli Lilly's ($LLY) Lilly Ventures and Starfish Ventures returned for the latest round of funding after previously investing in Protagonist.

A spinoff from the University of Queensland in Australia, Protagonist plans to use the infusion of capital to continue preclinical work on its a pipeline of orally available peptide therapies. The second-round financing, which adds to the company's $9 million Series A round, should support the company until its initial human study, CEO Dinesh Patel told FierceBiotech. Asish Xavier, vice president of venture investments for J&J Development Corporation, has joined the board of directors of Protagonist in connection with the financing deal.

"The corporate venture folks not only provide us with the funding," Patel said in an interview, "but they also bring in a good deal of insight into the kind of science that we are developing."

Protagonist, which has labs in Menlo Park and Brisbane, has made inflammatory diseases the focus of its research. Its peptide drugs are based on chemistry that enables the amino acid-based compounds to avoid digestion in the gut, making them potential treatments for inflammatory bowel diseases. The approach won a key endorsement with a January 2011 partnership with Ironwood Pharmaceuticals ($IRWD), whose claim to fame is the oral peptide drug called Linzess, which garnered FDA approval in August for treating irritable bowel syndrome and chronic constipation.

Ironwood and Protagonist expanded the collaboration in December, marking the second partnership victory for the startup in 2012 after its discovery deal announced last June with Zealand Pharma. Protagonist and its two corporate partners could have initial drug candidates from the startup's di-sulfide rich peptide platform in human trials by 2015-2016, Patel said.   

- here's the release

Slideshow: Dinesh Patel - Looks like an exciting 2013 from the J.P. Morgan Healthcare Conference

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