Cerenis to get $53.5M in VC
Biotech firm’s deal is largest in state history
By Tom Henderson-Crain's Detroit Business
ANN ARBOR, MI -- (November 14, 2006) -- Ann Arbor-based biotech company Cerenis Therapeutics Inc. will announce today at the American Heart Association’s scientific conference in Chicago that it has agreed to terms on what is probably the largest venture-capital investment in state history: $53.5 million from U.S., French, Swedish, German and Japanese investment firms to help bring its cholesterol-fighting drugs to market.
The deal, according to Emily Mendell, vice president of strategic affairs and public outreach for the Virginia-based National Venture Capital Association, is the largest state deal in her database, which goes back to 1980.
She said it is the third-largest biotech deal in the U.S. this year. New Jersey-based Amicus Therapeutics Inc. has the year’s largest deal, $60 million in September. The previous largest deal in Michigan since 2000 was the $31 million received by Ann Arbor-based biotech QuatRx Pharmaceuticals Co. in December 2004.
Last July, Cerenis got its first VC investment of $30.5 million.
Cerenis Therapeutics Holding was founded in March 2005 by two former executives of Ann Arbor-based Esperion Therapeutics who left the company when it was acquired by Pfizer Inc. in 2004. In June 2005, Cerenis Therapeutics Inc. was incorporated in Delaware as a wholly owned subsidiary so it could go public on Nasdaq when and if there is an initial public offering.
Co-founder and CEO Jean-Louis Dasseux, who got his MBA from the University of Michigan, is based in France, so he can be close to researchers at the University of Toulouse and France’s National Institute for Science and Medical Research. Dasseux, who holds numerous U.S. and international patents, including several for potential cardiovascular drugs, was Esperion’s senior vice president of business development and technologies.
COO William Brinkerhoff, who also was a vice president of business development at Esperion, and vice president of development Martiza Oxender are based in Ann Arbor.
Brinkerhoff said this round will be used to fund Phase I FDA trials in 2007 and double his local marketing staff from five to 10. The staffing in Toulouse is also expected to double to 10.
Until now, elevated levels of cholesterol primarily have been treated with drugs known as statins, which reduce the levels of low-density lipoprotein, the so-called bad cholesterol that builds up in arterial walls.
Cerenis takes the opposite approach, using drugs to raise high-density lipoprotein, the so-called good cholesterol. One is a synthetic HDL known as Cerenis HDL. Others of its drugs are intended to improve HDL function in the liver, where LDL is transported from the bloodstream by HDL and broken down.
Pfizer bought Esperion because of the drugs it was pursuing to raise HDL.
Brinkerhoff said Cerenis HDL, pending successful Phase I trials to show the drug is safe and Phase II and III trials to show it works, could be on the market as early as 2010.
“Pfizer is farther advanced in the clinic. They’re ahead of us in the development pathway,” said Brinkerhoff. “If they get to the market first, that’s good news for us. There’s no one better at creating a market than Pfizer, and there’s a lot of education that needs to be done. Having them ahead of us is fine.”
He said Cerenis would compete when it comes to market on efficacy. “We have confidence in our Cerenis compound because it’s highly potent,” he said.
Rick Chambers, Pfizer’s director of media relations for Midwest operations, said Phase III trials are underway for the company’s HDL-boosting drug, Torcetrapib, which is used in conjunction with its LDL-lowering drug, Lipitor. He declined to say when the drug could hit the market.
Mary Campbell, one of three principals in Michigan’s oldest venture-capital firm, Ann Arbor-based EDF Ventures, founded in 1987, and one of the investors in both rounds, said it is the strength of Cerenis’ intellectual property that makes it such an attractive investment.
Others investing in both rounds were Sofinnova Partners, based in France; HealthCap of Sweden; NIF Ventures Co. Ltd. of Japan; and San Francisco-based Alta Partners.
Two new investors were TVM Capital of Munich and Boston, and OrbiMedAdvisors L.L.C. of New York City.
Charles Rothstein, co-founder and senior managing director of Farmington Hills-based Beringea L.L.C., said that while the deal was very large by state standards, “for companies in their peer group, it’s not mind-boggling. These companies are very expensive to move along. The payoffs can be huge but it’s very high-risk stuff. Investors who do this are very specialized. It’s not for the faint of heart.”
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