San Diego Biotech Raises Over $30M to Fight Deadly Fungal Infections

6/25/14Follow @bvbigelow

A new San Diego biotech, led by former Trius Therapeutics CEO Jeff Stein, has raised over $30 million to advance new drugs to treat life-threatening invasive fungal infections, according to a recent regulatory filing.

Stein declined to discuss the financing by phone this morning, saying a press release is planned next week for the seed-stage startup, which is undergoing a name change. The San Diego startup apparently aims to develop compounds that elicit or amplify an immune response to fungal infections.

The company was founded in the Boston area two years ago as K2 Therapeutics, and lists Kevin Forrest, a principal in the Waltham, MA, office of 5AM Ventures as a co-founder. Forrest joined 5AM Ventures in 2005, after obtaining his doctorate in molecular biology from Princeton University, where he studied RNA-based regulatory processes. Kevin Judice, the former Achaogen founder and CEO and a specialist in antibiotic drug development, is the startup’s acting chief scientific officer.

5AM Ventures lists K2 Therapeutics as a portfolio company on its website, and Scott Rocklage, a managing partner in the firm’s Waltham office, is identified as a director in the Form D regulatory filing made earlier this month. The form indicates that the company has raised over $30.3 million—and plans to raise up to $12.4 million more, for a total of $42.7 million in equity funding.

The filing also lists Patrick Heron of Frazier Healthcare and Nina Kjellson of Interwest Partners as directors, along with two San Diego biotech CEOs: Cadence Pharmaceuticals CEO Ted Schroeder and Dan Burgess, the former CEO of Rempex Pharmaceuticals (acquired last December by The Medicines Co. (NASDAQ: MDCO) for a total of $474 million).

A separate regulatory filing submitted at the same time indicates that investors raised an additional $6 million to acquire the assets of another corporation.

Stein has emerged in recent years as an industry leader in antibiotic drug development, and has served as the president and chairman of the nonprofit Antibiotics Working Group since it was formed early last year. The industry-led group has called for overhauling regulatory, investment, and commercial policies that restrain the development of new antibacterial drugs.

Each year, tens of thousands of Americans die from microbial infections, usually during hospital stays, that are resistant to antibiotics.

In a letter to the editor of The New York Times last year, Stein wrote, “Dr. Janet Woodcock of the Food and Drug Administration notes that the antibiotics pipeline is so thin that we face ‘a huge crisis worldwide.’”

Stein oversaw the sale of Trius to Lexington, MA-based Cubist Pharmaceuticals for more than $700 million last August, following the successful development of tedizolid phosphate, a new antibiotic treatment of acute bacterial skin infections caused by Gram-positive bacteria, including methicillin-resistant Staphylococcus aureus. Cubist (NASDAQ: CBST) won FDA approval to market the new antibiotic, now known as Sivextro, just last week.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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