Specialty Drug Co. APT Pharma Breathes In $22M
DOWJONES VENTUREWIRE– OCTOBER 5, 2007
APT Pharmaceuticals Inc., a company specializing in treatments for underserved pulmonary markets, has raised $22 million in Series A-2 financing.
New investors Great Point Partners and Versant Ventures led the round, joined by existing investors Charter Life Sciences and Vivo Ventures.
Stephen Dilly, president and chief executive of APT, declined to say if the terms and valuation were the same as the earlier A round. "It's a continuation of the A in large part," he said.
In March 2006, APT received a $3 million commitment, closing its Series A with $9 million pledged from Charter, Vivo and Research Corp. Technologies. Dilly said the company ultimately only drew down $8 million of the round.
Based in Burlingame, Calif., APT is a specialty drug developer, looking to reformulate existing compounds to treat underserved conditions, particularly in the lungs. The company's lead compound, Pulminiq, is an inhalable form of cyclosporine that has completed Phase II trials for lung transplant rejection.
"Lung transplant patients survive on average 4 1/2 years," said Dilly, "as opposed to kidney or heart transplants, which are more like 10 years."
Other research projects, which are in preclinical, are looking at other respiratory conditions, including bronchiolitis, emphysema and fibroid conditions, as well as other programs, such as a cardioprotectant therapy.
Camille Samuels, managing director at Versant, said one of the company's main appeals is its targeting of underserved diseases. "With unmet needs, there's not a lot of competition, there's an easier regulatory pathway and there are fewer competitive hurdles," she said. Another appeal is the small marketing team needed, given the small number of facilities treating lung transplant patients. She estimated the projected sales force at eight.
Samuels compared APT to an earlier Versant investment: NovaCardia Inc., another reformulation company, which filed to go public earlier this year but was ultimately acquired by Merck & Co. last month for $366.4 million. She said APT could replicate that company's exit, or she thinks it could be a viable IPO candidate ultimately in its own right. "The neat thing about this one is they could take it all the way," she said.
In the meantime, Dilly said the company needs to reach certain milestones before it receives a major jump in its valuation. "We believe there is a significant valuation inflection in getting to Phase III and we would like to bring some other products to the clinic," he said. The Series A-2 money should last the company 18 months, he said.
As a result of the financing, Samuels and David Kroin, managing director at Great Point, have joined the board of APT.
APT has seven employees.