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

7/22/10Follow @xconomy

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 with an equal ratio of effect against the three transmitters, and found it caused too much nausea or heart side effects—DOV’s innovation was to find the right ratio to minimize the toxicity of the triple threat, McKinney says.

Euthymics has pulled together an experienced team to pursue this new drug against depression. The scientific co-founder is Franklin Bymaster, who spent 33 years at Lilly working on many of its greatest hits for depression and schizophrenia. And Mauricio Fava, the vice chair of psychiatry at Massachusetts General Hospital and a leading authority on depression treatment, has agreed to be the principal investigator of the next big clinical trial for Euthymics.

That study is the main task on the company’s agenda. Plans are to enroll 300 patients who didn’t respond well enough to a first round of conventional treatment with a selective serotonin reuptake inhibitor, McKinney says. The trial should be ready to get underway before the end of next June, and produce results by the middle of 2012, he says.

That’s when Euthymics will reach a turning point. If the data are promising, it could choose to just get acquired by a Big Pharma company. Or, it could decide to keep going on its own, raising more capital for another rigorous trial that will be required for the drug to win FDA approval. The U.S. drug regulator is likely to require data from at least 1,500 patients in clinical trials, so this is going to take Euthymics, or somebody else, a lot more than $24 million to get through the hurdles to become a marketed product.

This always feels like a dumb question because of Boston’s strength as a biotech hub, but I did feel the need to ask McKinney why the new company is setting up in Boston. The answer, obviously, is that the principal investigator is in Boston, the company’s contract research organization is in Boston, and two of the company’s four venture backers are in the Hub as well. While we talked yesterday afternoon, McKinney was looking for a new place to live in Massachusetts.

“Boston is a happening place to be when it comes to the small molecule depression space,” McKinney says.

While depression is the main focus of the company, McKinney pointed out that there was a reason he didn’t just take a license from DOV to its lead drug. Euythmics bought the whole company in order to get some other assets which could prove useful for other neurology conditions like attention-deficit hyperactivity disorder, obesity, anxiety, obsessive compulsive disorder, and drug addiction.

Of course, those could just be a few proverbial “shots on goal” that never amount to anything. The first order of business will be to prove in a larger clinical trial that what DOV saw was no fluke, and it’s the kind of thing a company as big as Novartis would like to own.

“You don’t see $24 million Series A deals that often,” McKinney says. “This drug has a great efficacy profile, without some important side effects, and a team that knows how to develop antidepressants. With a syndicate of this quality, you can tell this is something important.”

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