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medical devices that can be used in hospitals and homes. Gallotto estimates that the total global market for patient nutrition is $33 billion a year.
Gallotto, Margolin, and other members of Alcresta’s startup team are veterans of Alnara, an enzyme startup that Eli Lilly acquired for $380 million in 2010. Alnara developed enzyme-based drugs that could be taken orally, including a treatment for the lung disease cystic fibrosis. The FDA turned down Lilly’s application to market the drug a year ago.
After selling the previous company to Lilly, the Alnara team moved on Allena, which is developing technology to enhance the stability of enzymes, so they don’t get chewed up in the stomach before they can go to work. On March 28, the company offered a glimpse at its pipeline when it announced it had struck a deal with San Diego-based Althea Technologies. Althea’s enzyme patents and manufacturing capabilities will be used to develop a drug for hyperoxaluria, a rare condition that can cause kidney stones or chronic kidney disease. Allena expects to begin clinical trials of its hyperoxaluria drug, called ALLN-177, by the first quarter of next year, Margolin says.
Eight full-time employees are working for both Allena and Alcresta. (Gallotto is also COO of Allena.) Granted, the two companies will face completely different routes to market—Allena will endure the lengthy FDA drug-approval rigmarole, while Alcresta’s product candidates will go through a much less involved process—but Margolin believes each can still benefit from a shared management team. “We think we’ll be able to leverage our common know-how and hold down costs, even though we’re focused on two very different markets,” he says. Gallotta estimates the companies could save as much as 30 percent in overhead expenses such as real estate and information technology.
Gallotta says Alcresta could get to market with its first nutritional products as early as next year. At some point, he acknowledges, the companies may find themselves at such different stages developmentally that it will make sense split the management teams. “This unique model is mostly valuable when you’re starting up,” he says. “That’s when your synergies are most applicable to two different companies.”
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