Jerusalem-based Chiasma has raised $33.8 million of a proposed $56.3 million round, despite cancellation of an approximately $595 million deal with global biotech Roche last summer. New funds were provided by a portfolio of investors including MPM Capital, Abingworth, 7-Med Health Ventures LP, ARCH Venture Partners and F2 and F3 Ventures.
Chiasma has shown promise as a biopharmaceutical company dedicated to developing oral drugs that were previously only available by injection. The company’s technology involves coating small molecules in a way that prevents them from breakdown in the digestive system, giving the active ingredient the ability to enter the bloodstream as solid hydrophilic particles in a hydrophobic medium.
Chiasma’s flagship drug, Octreolin, is in development for the treatment of acromegaly, a rare and progressive disorder that enlarges hands, feet and parts of the face as the result of an excess of growth hormone. The drug received orphan drug status in 2010 as a pioneer therapeutic in oral form, allowing additional tax benefits and exclusivity to Chiasma upon its approval.
In 2013, Chiasma announced its intent to provide Roche with a worldwide exclusive license to Octreolin for acromegaly and neuroendocrine tumors upon completion of its pivotal Phase III trial. Roche would have been responsible for commercialization and Roche’s subsidiary Genentech would take over U.S. marketing if the drug received FDA approval. Hal Barron, M.D., Roche Global Head of Product Development and Chief Medical Officer stated at the time:
“If approved, Octreolin would be an important alternative for patients with acromegaly, a disorder that develops when a person’s pituitary gland produces too much growth hormone. Octreolin is an investigational oral regimen that avoids the painful injections of current treatment options.”
According to the terms of the deal, Chiasma received $65 million upfront, and would have received future considerations of up to $530 million for development and commercial milestones and tiered, double-digit royalties on Octreolin net sales. According to Globes, Roche chose to cancel the agreement “after receiving additional information about the trial, and after further consultation with the regulatory authorities.” Chiasma is preparing an FDA application and hopes to secure approval this year.
The current leading therapy for acromegaly is Novartis subsidiary Sandoz‘ Sandostatin LAR. Patents expired for the drug in 2010 in most markets and in 2014 in the U.S., but the drug has been resilient to generic competition. Chiasma’s Octreolin contains the active ingredient of Sandostatin, octreotide, but in an easier to administer oral form. Novartis recently received FDA approval for its Cushing’s Disease drug, Signifor LAR, as a successor to Sandostatin for acromegaly with superior efficacy. The global market for acromegaly is estimated to be $1.8 billion.