A company that spun out early last year from a Kalamazoo drug developer plans to move its office to San Diego, Calif. after securing $40 million in new venture capital funding.
Cirius Therapeutics Inc. said today that it closed the capital round and hired three veteran industry executives who will run the company from an administrative office in San Diego. Cirius Therapeutics’ research and development operation will remain in Kalamazoo.
Formerly known as Octeta Therapeutics, which was spun out last year from Kalamazoo-based Metabolic Solutions Development Co., Cirius Therapeutics is developing a new treatment for nonalcoholic fatty liver disease and liver fibrosis.
Cirius Therapeutics will use the new capital to fund Phase 2B clinical trials for its next-generation insulin sensitizer to treat fatty liver disease, which is connected to insulin resistance and affects an estimated 16 million people in the U.S.
New investors involved in the capital round include Seattle, Wash.-based private equity and venture firm Frazier Healthcare Partners; a holding company in Denmark for a group of health care companies, Novo A/S; Chicago-based Adams Street Partners; and Renaissance Venture Capital Fund in Ann Arbor.
Grand Rapids-based Hopen Life Science Venture, an existing investor and early backer of Metabolic Solutions, also invested in the capital round.
Cirius Therapeutics’ management team consists of CEO Bob Baltera, chief medical officer Howard Dittrich and chief business officer Brian Farmer. The San Diego Tribune reported today that the three had previously worked together at a San Diego pharmaceutical company — Laguna Pharmaceuticals, which closed in December 2015 — and were hired by Frazier Healthcare Partners in early 2016 to seek out a company in which to invest.
Metabolic Solutions initially set out to develop a new drug to treat Type 2 diabetes and found its compound may work on other metabolic diseases. The company in February 2016 formed Octeta, now known as Cirius, to focus solely on a drug for fatty liver disease.
Metabolic Solutions CEO Stephen Benoit told MiBiz last year that new treatments for fatty liver disease have a regulatory review processes and financing requirements that differ for the other diseases.
“The type of investor that’s interested in (liver disease) is not the type of investor that’s interested in Parkinson’s and Alzheimer’s disease and are not the same investors that might be interested in diabetes,” Benoit said.