NormOxys Pockets $17.5M for Drugs Against Heart Failure, Cancer

5/24/10Follow @xconomy

NormOxys, the Wellesley, MA-based company on a quest to make a new class of drugs that normalize oxygen levels in deprived tissues, has raised $17.5 million in venture capital to run its first set of tests in people with chronic heart failure and cancer.

The financing was led by a new investor, Princeton, NJ-based Care Capital, and included the company’s original backer, Switzerland-based Index Ventures. NormOxys, founded in 2004, has now raised about $30 million since its founding.

NormOxys, which we profiled when it emerged from stealth mode in December, is certainly pursuing a novel idea. The company’s lead drug candidate is a small-molecule compound that it says can induce tiny oxygen-carrying red blood cells to release a controlled amount of their oxygen payload into tissues that desperately need more oxygen. NormOxys is thinking specifically about heart muscles laboring under the stress of congestive heart failure, unable to pump enough blood to provide the energy people need. This is a tricky thing to do, because delivering too much oxygen too fast can be a bad thing. Other companies have tested drugs that increase the production of red blood cells, or the amount of hemoglobin that carries oxygen, but have led to serious side effects, including heart attack and death.

But if NormOxys can show in a couple early studies over the next year that its controlled release of oxygen works in people like it has in animals, the company could tap into a potentially very big market. An estimated 5 million people in the U.S. suffer from chronic heart failure, a condition that causes severe fatigue and death. NormOxys could offer an alternative therapy to the standard beta-blockers and ACE inhibitors that have a more limited effect in boosting exercise capacity, at least compared to what NormOxys says it has seen in animals so far.

“We can get to proof of concept relatively quickly, and it will have a large impact on our value,” says CEO Martin Tolar. The prize, once the concept is proven, will be a partnership with a big drugmaker or an acquisition, Tolar says.

The NormOxys method is based on biology research from Claude Nicolau, a visiting professor at Tufts University in Medford, MA, and chemistry research from Jean-Marie Lehn, a Nobel laureate at the College de France in Paris. Their approach is to create drugs that work as “oxyrens,” which interact with hemoglobin in a way that allows that protein to release much more than the usual one-fourth of oxygen it binds with. The lead drug candidate is called OXY111A.

Today, NormOxys is also announcing that it has started the first clinical trial of OXY111A in healthy volunteers. This will be a typical study in which 60 to 70 volunteers get a variety of escalating doses to gauge safety of the drug. Importantly, NormOxys will also take blood measurements of a biomarker called P50, which will measure whether the drug is doing what it’s supposed to do at the molecular level. That scientific readout will be correlated, NormOxys hopes, with clinical evidence that suggests the drug can help patients exercise more vigorously.

If all of that goes according to plan, NormOxys will quickly move on to the next step. That will be a study of people who are actually sick with heart failure—not healthy volunteers, Tolar says. That trial should be ready to start as soon as late summer or early fall. It’s possible that NormOxys could have its first evidence that the drug works in patients by the end of 2010, he says.

Using the NormOxys approach for cancer is a little more complicated, and it will take a little longer to bear fruit, if it ever does. The idea starts with the assumption that about three-fourths of tumors are in a stressed, low-oxygen state. As I described back in the December feature, such a “hypoxic” state of tumors prompts them to come up with novel ways to stay alive in that stressed state, by producing new blood vessels to nourish themselves, and by switching off normal cell suicide pathways that control the regular turnover of healthy cells.

It might sound crazy to think you can kill tumors by supplying them with MORE oxygen, but that’s what NormOxys is saying. By delivering more oxygen to the tumor, it then switches out of the stressed-out survival mode, and stops growing new blood vessels and keeps its regular cell-suicide switches operating like normal. That should allow natural “apoptosis” processes to essentially kill the tumor, NormOxys says.

Tolar didn’t tell me when the company can get its cancer trial up and running, but he says he expects to have results by this time next year, May 2011.

Once those results arrive, Tolar says he hopes to be negotiating with a pretty strong set of cards in his hand. He has been sowing the seeds of expectations in pharmaland for a while now, and says he’s particularly jazzed to have Care Capital join this financing because of its connections in Big Pharma. Care Capital partner Argeris “Jerry” Karabelas, a former CEO of pharmaceuticals for Novartis, is joining the NormOxys board, which is currently chaired by former GlaxoSmithKline CEO J.P. Garnier.

“We do not have your usual venture finance guys, but we have people who have run large pharma businesses,” Tolar says. “They have a clear understanding of what needs to be done.”

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