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Drug Discovery Company Lands Venture Funds, Licensing Deal

Diabetes Test (NIH)

(National Institutes of Health)

Vascular Pharmaceuticals Inc., a drug discovery company in Chapel Hill, North Carolina, secured $16 million in series A funds, the first round of financing after start-up. The company, a developer of drugs to treat complications of diabetes, also signed a licensing agreement for its lead compound with Janssen Biotech, a division of Johnson & Johnson.

The financing was led by Intersouth Partners and MPM Capital; other participants in the round were not disclosed. Intersouth Partners is a venture capital firm specializing in start-up companies in the southeastern U.S., while MPM Capital is a dedicated life sciences venture capital investor.

Vascular Pharma’s lead candidate is VPI-2690B, a monoclonal antibody to treat diabetic nephropathy that targets the insulin-like growth factor-I signaling pathway, stimulated by hyperglycemia, or high blood sugar associated with diabetes. In people with diabetes, nephrons — structures that filter blood and help remove wastes — thicken and slowly become scarred over time. The kidneys begin to leak and protein passes into the urine.

In animal models, VPI-2690B reverses the development of proteinuria — an excess of serum proteins — and prevents histological changes in the kidneys of diabetic animals. The research behind VPI-2690B was conducted by its inventors David Clemmons and Laura Maile of the University of North Carolina at Chapel Hill medical school. Clemmons founded Vascular Pharma in 2005.

In the separate licensing agreement, Vascular Pharma grants to Janssen Biotech rights for VPI-2690B in exchange for upfront and contingent milestone payments; the financial amounts of those payments were not disclosed. Janssen Biotech will also have the option to acquire Vascular Pharma following a planned phase 2 clinical trial of VPI-2690B.

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Hat tip: Fortune/Term Sheet

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