Vascular Pharmaceuticals, a drug discovery company developing a product to treat patients with complications arising from diabetes, has successfully completed a $16 million Series A equity financing.

The Series A financing was co-led by Intersouth Partners and MPM Capital and is the company's first institutional round of funding. Vascular Pharma will use the $16 million to continue development of VPI-2690B, a pre-clinical candidate for the treatment of diabetic nephropathy.

In addition to the Series A financing, Vascular Pharma has entered into an agreement with Janssen Biotech, which grants the latter the exclusive right, at its own discretion, to acquire Vascular Pharma following the completion of a planned phase II clinical study of VPI-2690B upon pre-negotiated terms and conditions set forth in the agreement. Janssen will provide Vascular Pharma with an initial upfront payment and certain contingent milestone payments in return for its rights under the agreement.

Vascular Pharma's development efforts are focused on its preclinical candidate, VPI-2690B, which targets a pathway that is stimulated by hyperglycemia. In multiple animal studies, VPI-2690B has been shown to slow the development of diabetic complications including nephropathy, accelerated atherosclerosis and retinopathy.