Cerenis Therapeutics lands $51.7 million in Michigan's biggest venture capital deal in years
Cerenis Therapeutics SA, a biotech company with dual headquarters in Ann Arbor and France, recently secured $51.7 million (40 million euros) in fresh capital to continue developing its cholesterol therapy technologies, officials announced tonight.
The transaction is the biggest venture capital deal for a Michigan technology company since Cerenis raised $53.5 million in November 2006. The company also announced tonight that it had received 10.7 million euros ($13.8 million) from a French governmental organization to fund a drug manufacturing partnership with a firm called Groupe Novasep.
The additional financing will support clinical development of several therapies that would improve the body’s production of so-called “good” HDL cholesterol, which helps the body eliminate harmful lipids and plaque that can cause diseases.
The company’s most advanced therapy, a drug called CER-001, would treat acute coronary syndrome and is expected to start a Phase 2 clinical trial later this year. That's the second step in a three-stage validation process required by the U.S. Food and Drug Administration.
Cerenis has about 12 employees in Ann Arbor, including its chief scientific officer and chief operating officer and several former Pfizer employees.
“What we’ve tried to do is develop a good product with a very good team and top-tier investors,” Cerenis CEO Jean-Louis Dasseux said in a phone interview from France. “The management team and the team at Cerenis is very well experienced with a lot of knowledge in HDL. And that is the reason why we’ve been able to attract more investment to the company.”
For its latest round of venture capital, the Fund for Strategic Investment provided 20 million euros. The other 20 million came from Ann Arbor-based EDF Ventures, Sofinnova Partners, HealthCap, Alta Partners and TVM Capital, OrbiMed, DAIWA Corporate Investment.
The company also announced that it is adding Jean-Pierre Garnier, former CEO of United Kingdom pharmaceutical giant GlaxoSmithKline, to its Board of Directors as a representative of FSI.
The venture capital deal is one of Michigan’s biggest over the last decade. In 2009, venture capitalists invested about $130.6 million in 19 Michigan companies, according to the Michigan Venture Capital Association. Life sciences companies received $58 million of that financing.
Prior to this deal, venture capitalists had invested about $76 million in Michigan companies of all types in 2010, MVCA Executive Director LeAnn Auer said.
Dasseux, who still owns a home in Ann Arbor, said Cerenis plans to add employees to its local operation, though he didn’t have specific projections. The company has 26 employees worldwide.
“I do believe Ann Arbor is a great city with a lot of very talented people,” he said.
File photo | AnnArbor.com
Getting market approval for a drug that boosts HDL cholesterol levels is a challenge that has largely stumped the pharmaceutical world. Cerenis' top drug candidate is still at least seven years from the market.
But raising HDL cholesterol is considered an enormous opportunity - similar to the massive market for Pfizer’s Lipitor, which lowers bad LDL cholesterol and is the world’s best selling drug.
One of the Ann Arbor region’s most celebrated startups, Lipitor co-founder Roger Newton’s Esperion Therapeutics, also is pursuing HDL therapies.
Cerenis was founded in March 2005 by veterans of the “first” Esperion, which Newton co-founded and sold to Pfizer for $1.3 billion in 2004.
For Cerenis, the influx in capital reflects a belief among its investors that the company’s technology holds significant promise.
The firm had raised $84 million in two separate equity fundraising rounds in 2005 and 2006.
Venture capital is the lifeblood of startup drug companies, which typically need huge piles of cash to do business. Few drugs successfully navigate the FDA's expensive regulatory process. It can take $1 billion and 20 years to develop a drug from inception to the marketplace.
Auer said the additional capital for Cerenis marks another big win for Michigan’s biotech industry.
“Michigan’s got some pretty sound companies that appear to be very promising to the life sciences industry overall,” she said.
Cerenis’ "Series C" VC deal ranks among the biggest investments in the Ann Arbor region's startup companies over the last several years:
--University of Michigan spinoff Lycera Corp. raised $36 million in April 2009 to develop drug therapies to treat autoimmune diseases. Lycera recently moved its official headquarters to Massachusetts but maintains its clinical research at the Michigan Life Science and Innovation Center incubator run by Ann Arbor SPARK in Plymouth Township.
--U-M spinoff NanoBio Corp. raised $22 million in two rounds in 2009 to continue developing its nanoemulsion-based therapeutic technologies. The company is expanding its Ann Arbor laboratories after striking a multimillion-dollar licensing deal with GSK.
--Newton licensed intellectual property from Pfizer and raised $22.75 million in May 2008 to restart Esperion, which Pfizer had closed in 2007.
--Ann Arbor-based QuatRx Pharmaceuticals, which is nearing an FDA application for its postmenopausal sex drug after reaching a multimillion-dollar licensing deal with Japanese pharmaceutical firm Shionogi & Co., Ltd., raised $44 million in May 2007.
Auer said she was particularly encouraged that Cerenis’ financing came from investors outside of Michigan and from Ann Arbor.
“It really takes local venture capital firms to originally find these companies,” she said. “Getting money from other VCs outside of Michigan further validates the company itself and the market it addresses. I think it bodes very well to have a little bit of both into the financing round.”
Venture capitalists delivered $3.54 billion for 406 U.S. biotech companies in 2009, according to the PricewaterhouseCoopers/National Venture Capital Association MoneyTree Report.