Early Pharma Partnership Proves Key to Armgo’s Startup Success
On February 1, Armgo Pharma CEO Sapan Shah will join Aisling Capital’s Dennis Purcell on stage at Xconomy’s first big New York conference to tell the inside story of how Aisling turned a Columbia University discovery into a promising biotech company. No doubt much of the discussion will revolve around a French pharmaceutical company called Servier, which Shah says was a key player in Armgo’s birth. “Armgo was formed both out of an academic lab and a Big Pharma partnership, which is a unique situation,” he says.
Shah and Purcell will pass along the wisdom they’ve gained from Armgo’s evolution at Xconomy Forum: New York’s Venture Emergence, a half-day event featuring some of New York’s most successful venture capitalists and entrepreneurs. Although the event will focus largely on technology startups—with presentations from NYC successes like Gilt Groupe, bitly, and Simulmedia—it will also spotlight biotech as an important part of the city’s bustling venture scene. It’s only fitting: New York leaders have singled out biotech as one of the industries that’s vital to the city’s economic future.
The story of Armgo began in the lab of cardiologist Andrew Marks, chairman of the physiology department and director of the Wu Center for Molecular Cardiology at Columbia University Medical Center. Marks developed a new class of molecules called rycals, which are designed to work on calcium channels in the body. In chronic heart failure—Armgo’s lead pursuit—certain calcium channels become leaky, causing the heart muscle to weaken. Rycals are designed to plug those leaks.
If Armgo can prove rycals work, the company could pioneer an entirely new way to treat heart disease—by getting at the very root of the problem rather than simply treating symptoms. “Most drugs [for chronic heart failure] don’t address the underlying disease,” Shah says. “They reduce the load onthe heart, but that doesn’t restore the ability of the heart muscle to contract.” Armgo’s goal is to prove that its lead compound—currently in Phase 2 trials in heart failure and arrhythmias—can restore normal heart function.
On March 22, 2006, Armgo launched with an exclusive license from Columbia to develop Marks’ discoveries. On the same day, Servier signed a development deal with Armgo that gave the French firm exclusive rights to market any resulting drug outside the U.S. and Japan. Shortly thereafter, Aisling made a $3.5 million investment in Armgo, according to VentureDeal.
The financial terms of the Servier deal were not disclosed, but Shah says the arrangement has been vital to Armgo’s security. “We have not had to raise money since the inception of the company,” he says. “Servier provides non-dilutive financing that allows us to maintain operations.”
Aisling’s senior managing partner Dennis Purcell adds that Servier’s involvement played a major role in his firm’s decision to invest in Armgo. “Cardiovascular disease is a very big category,” he says. “The deal with Servier enabled us to put our arms around what the development costs were going to be and not to have it open-ended.”
Armgo aims to establish a plan for late-stage development in heart disease by the end of 2012, Shah says. Rycals may also prove useful in other conditions where regulating calcium is important, Shah says, such as muscular dystrophy and other musculoskeletal disorders. Should Armgo decide to pursue those diseases, the company may look for other partners to help fund development, he says.
Prior to joining Armgo in April, Shah was the CEO of the U.S. division of Shionogi, a Japanese pharmaceutical company. He was based in suburban New Jersey and was thrilled to be offered an opportunity at Armgo, which is headquartered nearby in Tarrytown, NY. Shah says he’s excited to see the cluster of biotech companies forming in the New York area. “We have strong ties to New York because our venture group is here and our scientific founder is at Columbia,” he says. “From a talent perspective, New York and New Jersey are great. With all the consolidation in large pharma on the R&D side, there are quite a few really good scientists around.”
To hear more from Shah and Purcell about Armgo’s startup experiences, register now for Xconomy Forum: New York’s Venture Emergence. The event will take place at the Apella Event Space at Alexandria Center for Life Science from 2 p.m. to 6:30 p.m. on February 1. You can find more information—plus a great holiday discount through January 3—by clicking here. We hope you join Xconomy for this exciting review of New York’s startup scene.