Michael Gilman sounds just a touch frazzled when he first picks up the phone. The co-founder of Cambridge, MA’s Stromedix has been chained to his desk for days, attending to all the investors, lawyers, calls, e-mails, paperwork, i-dotting and t-crossing that need to come together to in order for his 2-year-old startup to close its Series B financing round. “It’s the first time I’ve done this,” he says of the $25 million deal.
Come again now, I say, checking my notes to confirm that this is, indeed, a second round. Technically true, Gilman answers, but “in some ways I’ve inverted the normal process.” Most entrepreneurs start with some sort of asset and go looking for the cash to commercialize it, he explains. But when Stromedix got off the ground, “I had money but no asset.”
The money was a little more than $4 million in Series A cash from Atlas Venture and Frazier Healthcare Ventures, with whom Gilman had connected in early 2006 after leaving a post as research executive at Biogen Idec (NASDAQ: [[ticker:BIIB]]). Gilman and his Atlas and Frazier colleagues knew they wanted to build a company around the idea of targeting fibrosis—a cellular process that plays a role in a host of different diseases and for which there are no approved drugs. But that was all they really knew. The investors stuffed Gilman in an office at Atlas and said, “‘Go figure it out,'” he says.
Part of what Gilman needed to figure out was why so few drug developers were pursuing what could be a very large untapped market for anti-fibrotic drugs. Essentially a form of scarring that can be triggered by inflammation, infection, diabetes, excessive alcohol consumption, and a number of other factors, fibrosis is the process that ultimately causes almost all types of organ failure. “There are very few greenfield opportunities like this left in medicine,” Gilman says. What’s more, the biology of fibrosis is actually well understood. So why no drugs?
Well for one thing, Gilman realized, the recognition of the role fibrosis plays in organ failure came only a decade or so ago—which is very recent in drug-development terms. Also, because fibrosis is a pathology that affects a broad range of organs and tissues rather than a particular disease, he says, it doesn’t fit well in the traditional drug-company structure, where the heart guys don’t talk to the liver guys, the liver guys don’t talk to the kidney guys, and so forth. And while a wide-open market has its allure, it also “kind of gives people the heebie jeebies,” he says—no approved drugs means nobody has come up with the right clinical trial design and blazed the trail for approval.
Undaunted, Gilman took his first-round cash and went shopping for an asset for Stromedix—a drug candidate with anti-fibrotic activity that was ready to run the clinical-trial gauntlet. He found just what he was looking for in
