Euthymics, Led by Orexigen Vet, Nabs $24M for Depression Drug With Fewer Side Effects

7/22/10Follow @xconomy

Boston has a new startup working on what could help people battle depression, even if they didn’t respond to prior treatment, and without the weight gain and sexual dysfunction side effects that have plagued the field for years.

Cambridge, MA-based Euthymics Bioscience is off and running toward that goal, having secured the initial installment of a Series A venture financing that could total $24 million if the company hits a series of milestones. The deal was led by Novartis Venture Funds and Venture Investors, and the syndicate includes Hambrecht & Quist Capital Management, GBS Venture Partners, and the State of Wisconsin Investment Board. The company is led by chairman Campbell Murray of Novartis Venture Funds, and CEO Anthony McKinney, a former executive at San Diego-based Orexigen Therapeutics (NASDAQ: OREX), and Genzyme (NASDAQ: GENZ).

The company (pronounced you-THIGH-mix) takes its name from the Greek word for a good mood. The company got started by spending $2 million to acquire what was left of Somerset, NJ-based DOV Pharmaceutical. What DOV learned, as it was running out of money in late 2008, was that it might have developed the first drug that strikes a delicate balance by affecting three neurotransmitters in the brain—serotonin, norepinephrine, and dopamine. Early data from a study of 56 patients suggested the DOV product might be able to adjust those neurotransmitters in just the right way to get the attractive combination of a drug that improves mood, without causing sexual dysfunction, weight gain, or cognitive impairment that sometimes happens with an earlier generation of depression meds.

Anthony McKinney

Anthony McKinney

If this can be proven in clinical trials, then Euthymics could have an important new treatment for a worldwide market estimated to be worth $20 billion a year.

“People have tried to do this for 20 years, and no one has been able to get in one molecule that modulates all three transmitters,” McKinney says.

Euthymics has an interesting backstory. While DOV was struggling during the fall of 2008, and investors were focused on its drug candidates at a later stage, the company quietly generated some promising early results from a compound then called DOV 21,947, and now dubbed EB-1010. Orexigen CEO Gary Tollefson, who had a long record at Eli Lilly working on huge neurology drugs like fluoxetine (Prozac) and duloxetine (Cymbalta), heard the buzz about this triple-acting anti-depressant. Tollefson, who was gravely ill with cancer at the time, looped in his chief operating officer McKinney, as they sought independent statistical validation for whether the DOV finding was legit.

They liked what they saw from the clinical trial, and also the business opportunity. Many of the older antidepressants have gone generic, and they don’t work for as many as two-thirds of patients. Some psychiatrists have experimented with combinations of generic drugs that work against serotonin, norepinephrine, and dopamine, but the regimen is hard to follow, and nobody had put a drug together that really worked as a single pill. Others had tried to do it … Next Page »

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