Time and again, free-flowing intellectual capital and the hefty pockets of venture investors have lured startups from their hometowns to the sunny West Coast. Now, a biotech firm that spent its formative years in Cleveland has changed its name, packed its belongings and made plans with its new CEO to move to La Jolla, California, on the promise of a drug for atrial fibrillation that is now in its final stage of clinical trials.
Laguna Pharmaceuticals, formerly known as ChanRx, announced Tuesday it has raised $30 million in Series B funding, which will be used to take the drug, based on a compound called vanoxerine, through phase three clinical trials, the last step required for Food and Drug Administration approval.
Atrial fibrillation afflicts more than 2 million people a year in the U.S. and that rate is expected to double by midcentury as the nation’s population ages. This condition occurs when the upper and lower chambers of the heart beat out of sync, and if left untreated can lead to stroke or heart failure. "We see distinctive promise for vanoxerine to help address the significant unmet need in atrial fibrillation," Jerel David of Versant Ventures, one of the firms that backed Laguna, said in a statement.
Bob Baltera will take the helm as chief executive officer of the newly named company. He served in the same role at Amira Pharmaceuticals until it was acquired by Bristol-Myers Squibb in 2011. He looks forward to bringing the drug through its final phase of development. “This is about commercialization, it’s not about proof of concept,” Baltera said to Xconomy. He called Laguna “a lean, mean, product development and commercialization machine.”
The $30 million pot of Series B funding came from investors at Versant Ventures, Frazier Healthcare, BioMed Ventures and Sante Ventures. Series B funding is typically used to scale up a business -- steps the company seems all too happy to take with its relocation and new leadership.
To succeed in raising Series B funding, companies must show they have made measurable progress that merits investment beyond the seed round. Laguna says in phase two trials, its drug helped 84 percent of patients to return to normal heart rhythm within 24 hours with no serious side effects. These results rival those of the leading intervention, which is an electrical shock treatment typically administered in hospitals. That treatment works immediately for about nine in 10 patients. Several medications are already available to treat the condition, too, either by thinning the blood to reduce the risk of stroke or slowing the pace at which the heart beats.
At the company’s new home in California, Laguna will join the 2,490 biomedical firms that already operate in the state -- most of which are small and trying to grow. Laguna was founded in 2006 as ChanTest, a pharmaceutical company in Cleveland, according to Xconomy. ChanRx was a ChanTest spinoff.