Serono spin-out Poxel raises €16m to fund phase II diabetes studies

A spin-out from Merck KGaA’s Serono unit, Poxel, announced a large series A funding round today, raising €16m ($20m) from a syndicate of investors led by the French venture capital firm Edmond de Rothschild Investment Partners (EdRIP).

Poxel joins a relatively elite group of big pharma spin-outs. Very few have been set up in the last couple of years despite predictions that these creations would become a more common sight as a result of R&D restructuring initiatives at big pharma. Another claim to fame is managing to raise the largest series A round in France since 2005 which Raphael Wisniewski, partner with EdRIP, tells EP Vantage reflects the development stage of Poxel’s lead asset, a novel phase II type 2 diabetes candidate.

Lead candidate

Poxel’s lead candidate is called imeglimin, which the company describes as first in a new class of anti-diabetic drugs, called glimins. The orally available drug targets three key defects of type 2 diabetes; insufficient insulin production, excessive hepatic glucose production and impaired glucose uptake by skeletal muscles.

The company believes imeglimin is the only antidiabetic to directly target the three main organs involved in glucose regulation, which it does through oxidative phosphorylation inhibition. The product is mainly an indirect activator of AMPKinase, acting at the mitochondrial level.

No data has been released on the compound yet, but Poxel says that the safety profile appears fairly benign and a phase IIa study found the drug’s efficacy to be equivalent to metformin.

The funding round was conducted primarily to run larger phase 2 combination studies, Mr Wisniewski says, following successful monotherapy studies.

“The product needs to show potential in combination, several studies are going to be initiated," he says.

Ultimately, large phase IIb dose ranging studies will be required and of course the requisite expansive phase III programme; Poxel plans to find a partner after generating proof of concept data. Mr Wisniewski says phase IIb data should be available by 2012.

Rare spin out

Poxel was founded in 2009 and came about as a result of Serono’s decision to quit the diabetes space. The exit has certainly been complete, as Merck has not even retained a stake in the spin-out.

Despite predictions a few years ago that big pharma spin-outs would start to become common, this does not seem to have materialised. This is possibly another victim of the credit crunch, which robbed many of the financial institutions that would typically have funded these set-ups of both the cash and the inclination to invest in risky propositions. 

Rare recent examples include Pfizer's Japanese research unit, RaQualia Pharma, which was spun out in 2008 and AstraZeneca's Swedish GI company, Albireo.

Like Albireo, Poxel has certainly been given a niche to focus in, with several diabetes candidates to work on. As well as imeglimin, it has several other pre-clinical candidates in the metabolic space, including an oral GLP-1 agonist, an AMPK activator and an FXR agonist.

Growing area

The market for diabetes treatments continues to expand, placing Poxel in a decent position. Indeed, this is one of the main factors that attracted the investment of EdRIP, Mr Wisniewski says.

“Diabetes is a big and growing area. Yes, it is competitive, but there are lots of opportunities,” he says.

Interestingly, an analysis by EP Vantageearlier this year found that deals struck in the endocrine space have dropped off considerably in the last two years, following a flurry back in 2007 (Resurgence of conventional and untrendy therapy area product deals in 2009, February 25, 2010).

This could simply reflect a natural ebb and flow of deal making, or maybe have come about as a result of the increasingly onerous cardiovascular safety regulatory hurdles that these drugs must now clear.

Given the size of the market, however, should Poxel’s agents show promise, big pharma interest should not be too hard to solicit.

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