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Wednesday, Sep 28, 2022

Backers Continue to Bet Big Money on Promising Biotechs

I’ll lead this week off with a couple of large financing rounds that have entered the fray in San Diego’s biotech sphere:

The first comes from a company that’s developing an injectable drug that aims to melt away belly fat. Lithera Inc. closed a $35.6 million Series C round — far exceeding its initial plans to raise between $20 million and $25 million.

The company, founded in 2007, has a modus operandi of taking Food and Drug Administration-approved drugs and rejiggering them to fit other applications. For instance, this fat-busting drug has been approved to treat asthma.

It’s also studying the drug, called salmeterol xinafoate, for its efficacy in treating a disorder that causes the eye to protrude from its socket. Quite a different application, no?

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Lithera’s injection “has the potential to be the first and only injectable drug” to reduce abdominal fat, CEO George Mahaffey said in a statement.

Investors include Alta Partners, Domain Associates and AKS Capital — the newest investor that closed out this financing round.

• • •

Carlsbad-based Thesan Pharmaceuticals Inc. closed a $49 million Series B financing round. The company develops treatments for skin disorders like acne and eczema.

The round was led by existing investor Novo Ventures, the life sciences investment firm associated with Danish pharma company Novo Nordisk A/S (NYSE: NVO).

Other investors in the round include SV Life Sciences, which has offices in San Francisco, London and Boston; Danish firm Lundbeckfond Ventures; and Novartis Venture Fund — the investment arm of multinational drug giant Novartis AG (NYSE: NVS).

Thesan, founded in 2012, secured a $16 million Series A financing round late that year. It claims that there has been a dearth of fundamentally new treatments for such skin disorders, despite the fact that 40 to 50 million Americans suffer from acne and eczema.

“We are very pleased with the deep financial backing provided by four top tier venture funds,” Thesan CEO Gordon Foulkes said in a statement.

• • •

Neurocrine Biosciences Inc. expects to raise $142 million in a new secondary stock offering. The company (Nasdaq: NBIX) is offering 8 million shares of its common stock, priced at $17.75 per share.

Neurocrine will also grant to the underwriters a 30-day option to buy up to an additional 1,050,000 shares of common stock.

The company’s stock nearly doubled in January after it announced positive results from a trial for its drug, NBI-98854, that treats tardive dyskinesia — a movement disorder that causes facial spasms. On Jan. 7, it rose 90 percent — up $8.75 — closing at $18.51.

It’s also collaborating with Chicago-based AbbVie Inc. for its drug, Elagolix, which treats uterine fibroids. The companies have been in collaboration for the hormone-based drug since 2010, and Neurocrine Biosciences said it’s on track to file a new drug application with the FDA in 2016.

• • •

California voters will be asked to approve an additional $5 billion to be set aside for stem cell research — and if they seem receptive, a funding extension to the California Institute of Regenerative Medicine will be added to the 2016 ballot.

This follows a 2004 ballot initiative that was voted upon to endorse $3 billion in bond money to be spent on stem cell research in the state. This money is expected to last until 2017, which is why adding a funding extension is already in the works, said Robert Klein, former chairman of the CIRM.

And the $3 billion in bonds set aside for the CIRM will require $6 billion to be paid back, so a $5 billion bond for stem cell research would require $10 billion paid back.

Much of the money has already been doled out to California stem cell researchers. Though no treatments have been approved from any of this research, it’s generally a field widely viewed as promising and has attracted sizable investments elsewhere.

For instance, businessman and philanthropist T. Denny Sanford donated $100 million late last year to establish a stem cell clinical research center at the University of California, San Diego.

There are a number of San Diego companies working in regenerative medicine, including the International Stem Cell Corp., Viacyte Inc. and Cytori Therapeutics Inc.

Send news about locally based health care organizations, biotech and clean-tech to Meghana Keshavan at mkeshavan@sdbj.com. She can be reached at 858-277-6359.


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