Stromedix, with Biogen Idec Roots, Seeks Exit from Regulatory Limbo

7/20/10

Cambridge, MA-based Stromedix is behind schedule on developing drugs that could stymie a cellular process that causes peoples’ bodies to transplanted kidneys to fail. Yet schedule delays are common in the unpredictable biotech business, and we’re only hearing about this one because of the candid nature of its co-founder and CEO, Michael Gilman.

When Stromedix closed its $25 million Series B funding round in April 2008, Gilman told Xconomy he wanted to be well into a mid-stage clinical trial of the firm’s lead drug for interstitial fibrosis in kidney transplant recipients by this point in 2010. However, the FDA has concerns about the safety of how the drug works in those patients, and Gilman and his startup now find themselves more than a year behind in their development plan.

The company’s drug, STX-100, is a therapeutic antibody licensed from the Weston, MA-based biotech giant Biogen Idec (NASDAQ: BIIB), where Gilman used to be a research executive. The antibody targets molecules linked to a cellular process called fibrosis, which causes organs to form scar tissues and ultimately fail. While fibrosis is common among all organ failures, Stromedix initially targeted kidney transplant patients because they are easily identified compared with other victims of fibrosis, and there’s a great need for ways to help them keep their new kidneys functioning for as long as possible.

Fibrosis is also a leading cause of peoples’ heart tissues to fail, something that hit close to home for Gilman last year. The 55-year-old CEO got an aortic valve replacement in November 2009 that sidelined him for six or seven weeks, he says. “I feel great,” he says. “I feel better than before.” Not one to keep his condition secret, he kept of blog of the experience on the public Internet, and he frequently makes personal comments on Twitter under the alias “wristshot.” (Yes, Gilman, a native of Canada, is a  hockey devotee.)

Gilman is also optimistic that the FDA will allow his firm’s kidney fibrosis study to move forward, perhaps in the first half of next year. His company, which has raised $29.4 million in venture capital since it launched in 2007, will need more support from venture investors to fund the trial. “We’re pretty psyched because we spent the last year a little bit in limbo, which is frustrating for me and the team, and I would say anxiety-provoking for the investors,” Gilman says.

Michael Gilman, CEO of Stromedix

Michael Gilman, CEO of Stromedix

While Stromedix’s efforts have been delayed on the kidney front, the FDA has given the six-person company permission to start mid-stage clinical studies of its drug for a lung disease called ideopathic pulmonary fibrosis. Gilman explains that the agency’s safety concerns about the drug were specific to recipients of kidney transplants, and the agency does not have the same concerns about its safety in patients with lung fibrosis. Still, Gilman declined to provide specifics about the agency’s safety concerns for the kidney group.

“I probably shouldn’t say what their concern is,” Gilman says. “It’s a perfectly legitimate concern, it’s just that the way they want us to address it doesn’t really make sense.”

The company wants to start the mid-stage clinical trial in patients with the lung condition—which makes breathing difficult—by the end of this year, with the study involving kidney transplant patients to follow next year. Stromedix plans to conduct the clinical trials using tools that analyze the drug’s impact on fibrosis by measuring the expression of certain genes. For kidney fibrosis, the firm has identified 93 genes that its drug will target, Gilman says. Each of the genes expresses a protein that is likely to play a role in fibrosis or tissue injury. Many of the same genes are present in lung fibrosis. By measuring the activity of these genes, the company will have an indication of whether its drug is working.

The genetic biomarkers are a big help in the company’s pursuit of a lung fibrosis drug because there are believed to be multiple causes of ideopathic pulmonary fibrosis (IPF), and it’s been historically difficult to diagnose the disease. InterMune (NASDAQ:ITMN), the Brisbane, CA-based biotech, has long sought FDA approval for its treatment for IPF. Its drug, pirfenidone, is under FDA review after completing multiple pivotal trials, and it could become the first drug to be approved for the lung disease.

In its initial mid-stage trials, Gilman says, the firm might seek to test its drug in a relatively small number of patients for a relatively short period such as two to three months. That’s not long enough to show clinical improvements, he says, but it could be enough time to see signs of activity against fibrosis at the molecular level. And the genetic tests could provide such evidence. These data are also important to attract more investment dollars. The firm’s existing investors include Atlas Venture, Bessemer Venture Partners, Frazer Healthcare Ventures, and Red Abbey Venture Partners. Biogen also owns shares in the startup.

Indeed, Stromedix will likely need more support from its existing investors to advance its lead drug through mid-stage clinical testing. Of course, that was supposed to be covered by the company’s second-round financing, according to the original plans Gilman told Rebecca about back in April 2009. Again, few things go as planned in the biotech business.

“It’s a crazy, crazy business that we’re in,” Gilman says. “It attracts a certain type of person who can sort of get by on their own internal enthusiasm, because the external reinforcements are not really there very often.”

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