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Elcelyx extends Series B financing for weight loss and diabetes

Monday, August 13, 2012

Elcelyx Therapeutics, a San Diego-based biotechnology company, has secured $4 million of a $7 million extension of its Series B private equity financing. Existing investors Morgenthaler Ventures, Kleiner Perkins Caufield & Byers and Technology Partners all participated in the extension.

Founded in 2010, Elcelyx has raised a total of $20 million, including the $4 million, and advanced two product candidates for weight loss and the treatment of diabetes and obesity into late-stage clinical development. The new financing will support clinical trials for proprietary product candidates Lovidia for use in nutritional supplement, food and beverage applications, and NewMet for patients with type 2 diabetes.

Elcelyx’ first-in-class Gut Sensory Modulators (GSM) are delivered directly to the gut where they intensify the body’s natural food-driven signals that trigger a sense of fullness and facilitate glucose regulation. This targeted approach greatly decreases the presence of the active ingredient in the bloodstream, which dramatically reduces side effects often seen with conventional therapeutics. Lovidia and NewMet are backed by rigorous science and clinical data demonstrating the candidates’ ability to meaningfully reduce weight and improve glucose regulation without side effects, respectively.

“Elcelyx has zeroed in on the gut to exploit a key mechanism of satiety and glucose metabolism, and has quickly and efficiently advanced its programs to show promise as a supplement for weight loss and a treatment for diabetes,” said Ralph Christoffersen, Ph.D., chairman of Elcelyx and partner at Morgenthaler Ventures. “The company’s dual-track strategy of developing dietary ingredients for weight loss and its cleverly formulated metformin for diabetes provide large-market, near-term opportunities that our investor syndicate couldn’t miss.”

The company’s nearest-term opportunity is Lovidia, a proprietary mix of generally recognized as safe (GRAS)-designated dietary ingredients, targeted to the consumer market. Lovidia can be used for multiple applications including as a dietary supplement for weight loss and prediabetes, and as a food additive for satiety and lower glycemic index. An early version of Lovidia demonstrated statistically significant progressive and sustained weight loss, with a threefold higher proportion of subjects losing 3%-5% of their body weight compared to placebo in a 16-week study evaluating 121 obese subjects who did not alter their diet or exercise.

Pharmaceutical product candidate NewMet is a delayed-release formulation of generic metformin, the number one diabetes product in the U.S. By targeting this GSM to the lower gut and avoiding systemic absorption, Elcelyx expects NewMet to have low bioavailability with preserved efficacy. This makes NewMet appropriate for the large population of renally impaired patients with type 2 diabetes that are excluded from taking metformin due to the risk of lactic acidosis, a life-threatening result of metformin build-up in the blood. NewMet is currently being evaluated in a dose-finding study.

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