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University Biotech Spinoff Secures $38M Venture Funding

Neuron illustration (NIH)

(National Institute on Aging, NIH)

Naurex Inc., a spin-off company from Northwestern University creating neurological and psychiatric drugs, closed a $38 million series B venture round, the second financing cycle after start-up. Financing for the Evanston, Illinois biotechnology company was led by new investor Baxter Ventures, and joined by new investor Savitr Capital, as well as 10 current backers including Northwestern University and three other pharmaceutical companies.

The company develops therapies addressing the N-methyl-D-aspartate or NMDA receptor, a molecule found in synapses, the part of nerve cells that permits the sending and receiving of signals. NMDA receptors play a key role in the plasticity of synapses, considered important to nervous system development, learning, and memory. Current drugs addressing NMDA receptors, such as ketamine, have had some success treating depression, but come with side effects resembling psychosis or have been subject to abuse.

Proceeds from the financing are expected to fund phase 1 and 2 clinical trials of the company’s two top drug candidates. Naurex’s lead compound GLYX-13 binds to and stimulates a response from NMDA receptors, and is designed for patients who have not responded well to existing antidepressant drugs.

Earlier this month, the company reported results of phase 2 clinical trials that show a single intravenous administration of GLYX-13 produces reductions in depression scores within 24 hours and persists for an average of seven days, an effect that measured nearly twice that seen with other antidepressant drugs after weeks of dosing. GLYX-13 was also well tolerated in early clinical trials, without the dangerous side effects of existing NMDA receptor drugs.

Naurex is developing a second antidepressive drug, NRX-1074, also addresing NMDA receptors, but configured as a drug that can be administered orally, rather than through an intravenous tube. In preclinical studies, NRX-1074 has shown similar signs of ketamine-like efficacy, but without apparent safety issues. The new funding will support phase 1 trials of the drug candidate.

Naurex was founded by Joseph Moskal, a biomedical engineering professor at Northwestern University and director of the school’s Falk Center for Molecular Therapeutics. The Falk Center promotes its connection to Naurex as part of a new organizational model “necessary to translate discoveries with therapeutic potential into clinically useful compounds.”

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