Isis Spinoff Altair Therapeutics Closes $17M Venture Round For Asthma Drug
[Corrected: 7:26 am Pacific, 11/12/09] San Diego-based Altair Therapeutics, a company developing inhalable drugs to block inflammatory proteins involved in asthma and other respiratory diseases, has closed on the second part of a Series A venture financing, meaning it has raised a total of $17 million this year. [An earlier version said the company has raised $17 million since inception, but that tally didn't count an undisclosed seed investment].
Domain Associates led the latest investment round, and AgeChem Venture Fund joined previous investors Thomas, McNerney & Partners, Forward Ventures, and the group that spun out Altair’s technology in the first place—Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS). Altair plans to use the cash to finish a mid-stage clinical trial of 30 asthma patients who will be randomly assigned to get the company’s AIR645 drug candidate, or a placebo.
Altair actually got started two years ago by Isis and Thomas McNerney. The idea was to see if Altair could apply the things Isis knew about gene-silencing technology, known as antisense, as an inhalable drug for respiratory diseases. The concept was an offshoot that wasn’t part of Isis’ core portfolio of drugs for cardiovascular and metabolic diseases. The idea was to make this inhaled antisense drug block a couple of inflammatory proteins that are implicated in asthma attacks—IL-4 and IL-13. The company says it has found some surprisingly encouraging results in early human tests on about 80 people. If that can be confirmed in subsequent trials, it could offer a new treatment option for a disease that affects about one out of every 18 people in the U.S., according to the National Institutes of Health.
“This is a great opportunity for antisense drugs,” said CEO Joel Martin, when I visited his office a few weeks ago. On the statement announcing today’s financing, he added: “We are thrilled.”
The Altair story really began in October 2007, around the same time another company spun out of Isis, called Excaliard Pharmaceuticals. In the case of Altair, Susan Gregory was the inventor and champion of the asthma drug’s prospects inside Isis. She ended up spinning the technology outside the company with help from Pratik Shah, a partner with Thomas McNerney. The deal was structured so that Isis would own 18 percent of the new company in preferred stock, and it stands to receive development milestones and royalties if Altair is successful.
Martin, one of the early scientists at Isis, first got exposed to the technology while he was still a partner with Forward Ventures in San Diego. He left Forward in October 2008, and liked what he saw at one of its portfolio companies, Altair, that he personally joined as CEO in May.
Ivor Royston, a partner with Forward and a member of Altair’s board, told my colleague Bruce Bigelow yesterday that he considers Altair an obvious pick for the portfolio.
“Even in the worst market, with the most restricted kind of financing, this would be a good investment,” Royston says. “This company is in the sweet spot for any venture capital firm.”
Altair sees plenty of room in the market for a new asthma drug. People use inhaled corticosteroid drugs to dampen the excess inflammation in the lungs, or take beta agonist drugs that act as smooth muscle relaxers to open up constricted airways, Martin says. They tend to be effective, although parents worry about corticosteroids potentially stunting the growth of children. About 40,000 people a day miss school or work in the U.S. because of asthma, and 5,000 people a day visit emergency rooms because of it, according to the Asthma and Allergy Foundation of America.
The big idea at Altair is to take a gene-silencing drug, based on antisense technology, that has dual action that dampens the production of IL-4 and IL-13, a couple of underlying proteins critical to the inflammatory process that leads to asthma and stuffy nose.
Other biotech companies, including Amgen, have taken a hard look at blocking this pathway with conventional injectable protein drugs, like antibodies, Martin says. The problem is that they are expensive and difficult to manufacture, and injectables are less convenient for patients. The Altair product, by contrast, can be given in a once-weekly inhalation, and it can be made at one-tenth the cost, Martin says. By being delivered directly to the lungs, only small amounts circulate through the bloodstream, which lowers the risk of side effects, he says.
One of the big scientific challenges has been to get the drug delivered right where it’s most needed in the lungs, Martin says. The best measurement of how Altair is doing on that is from clinical trials so far.
The first studies enrolled 72 healthy volunteers, and eight mild asthma patients who hadn’t received the usual corticosteroid treatments, Martin says. The goals were to see that the drug was safe at a variety of doses, how much of it circulated through the bloodstream, and how long it lasted in the body to determine the right dose frequency.
Then something surprising happened. Two of the patients had biomarkers of inflammation at baseline—which they really weren’t supposed to as part of the trial design, Martin says. But as it turned out, researchers saw three corresponding biomarkers of inflammation decline in those two patients, along with a decrease in the messenger RNA that makes the inflammatory proteins, Martin says. This offered an early sign that the drug might be working as intended, even before it was ready to be put to the test in a more rigorous study with the optimal dosing.
“This was an unexpected and happy result,” Martin says. “Our advisers all said Wow,”
Now Altair is looking to go beyond hints of effectiveness to start showing actual evidence. It has started a 30-patient clinical trial that will use the standard measure for many lung drugs, FEV1, which quantitatively measures how much air a patient can force out of their lungs in one second—and is generally considered a good indicator of how well a person’s breathing improves over time. Results should be available by September 2010, Martin says.
All of this is moving pretty fast for a company with just six employees. Getting the money, and getting close to mid-stage clinical trial data is a big deal for a company of this size. Martin pointed out that he’s been a venture capitalist for a long time, and he’s eager to see what the data will look like 10 months from now, because that’s the sort of thing that gets the attention of Big Pharma companies looking to do partnerships.
“This is a big event for us,” Martin says. “It’s a turning point in the company’s development.”