With Narrowed Focus, Elcelyx Prepares for Diabetes Drug Trial

Credit: Depositphotos image_5645691_chepko

For San Diego’s Elcelyx Therapeutics, 2014 may someday be remembered as “the year of heavy lifting.”

Since the fall of 2013, when Elcelyx spun out NaZura BioHealth as a sister company with the same management (focused on commercializing a dietary ingredient called Lovidia), the company has crossed off a variety of accomplishments that include:

—Selling NaZura BioHealth about a year ago in a deal that has not been previously disclosed. Elcelyx CEO Alain Baron said Elcelyx pocketed some proceeds from the sale, although he declined to provide details.

—Completing mid-stage clinical trials of Elcelyx’s drug candidate, a proprietary oral compound for patients with type 2 diabetes who cannot tolerate metformin, the first-line drug of choice for most of them.

—Securing about $6 million in funding last month from existing investors Morganthaler Ventures, Kleiner Perkins Caufield & Byers, Technology Partners, and GSM Fund. Including the latest funding, Baron said Elcelyx has raised a total of roughly $57 million over the past five years.

—Concluding what Baron described as “a protracted, but ultimately very productive conversation with the FDA” that has positioned Elcelyx for a final push in the development of its drug candidate.

“We’ve agreed on a path forward, and agreed on the studies we need to do,” Baron told me this week. “We’re confident that this is something we can do.”

Alain Baron
Alain Baron

Now Elcelyx is developing specific protocols for carrying out three late-stage studies that would involve a total of 1,500 to 2,000 patients—and considering the best way to fund them. Baron estimated the cost of completing Phase 3 trials would be almost $100 million.

Baron is not yet sure how the company will fund the late-stage trials, but he sees three options for the company: raising capital through an IPO; selling Elcelyx and its drug program to a pharmaceutical company with the wherewithal to complete the trials, or remaining private and raising enough capital for Elcelyx to carry out the late-stage trials itself.

Elcelyx was founded in 2010 with initial support from Morgenthaler Ventures, where Baron was an entrepreneur-in-residence.

From the beginning, the company had a

Pages: Page 1, Page 2

Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.