Pulmatrix Gets $30M And An NIH Grant To Develop A Broad-Spectrum Anti-Infective

Biotech's technology uses two mechanisms of action to prevent infection and keep pathogens from entering the lungs.

Pulmatrix has obtained further validation of its technology for developing broad-spectrum anti-infective drugs, receiving $30.2 million in a Series B funding round led by two new investors and also winning a $2.2 million grant from the National Institutes of Health to advance work on its lead program.

As the privately held biotech completes a Phase 1a/2b trial of lead compound PUR003 in influenza and prepares for studies in several new indications, the two transactions should give the biotech a financial runway for 18 months or more, CEO Robert Connelly said in an interview on Nov. 2, following the announcement.

"Even in a worst-case scenario where we don't do a deal or we don't get any additional non-dilutive funding, this money takes us well into quarter two of 2011, and that's assuming a number of clinical trials over the ones we're running this year," he said.

The Pulmatrix technology is among those seen by the U.S. government as offering potential protection against various types of flu, including the H1N1 strain currently circulating. The Lexington, Mass., firm calls its drug candidates inhaled cationic airway lining modulators (iCALM) that get away from a "one drug, one bug" method of fighting pathogens (Also see "Aporkalypse Next: Pulmatrix Moves Broad-Spectrum Inhaled Anti-Infective Into Phase II" - Pink Sheet, 5 May, 2009.).

"We are not targeting a pathogen or where a pathogen binds," Connelly said. "[Unlike] most therapies for infections, we are not trying to directly block or kill the pathogen. What we do is trigger a series of effects in the airway that are both biophysical and biological."

The biophysical mechanism involves increasing the body's own barrier effect at the airway/liquid interface to make it harder for pathogens to enter the lungs and also to increase clearance at that point, he explained. On the biological side, the drugs facilitate a set of responses, regardless of the type of pathogen, that interfere with replication of the virus and trigger anti-microbial factors, he said.

Study generating safety and efficacy data

Pulmatrix began a 24-patient, double-blind, placebo-controlled study of '003 in healthy patients this past May. The trial is intended to generate safety data and also show whether the drug is effective in reducing or eliminating symptoms, lessening symptoms that do occur and reducing their duration in patients exposed to a model virus.

Connelly said his firm plans to unveil data from the study in December. "The main thing we want to see here is are we safe and are we having an impact on the symptoms," he said. "This is pretty much the playbook that has been followed by [the Roche and GlaxoSmithKline flu antivirals] Tamiflu and Relenza ."

By the end of 2010 or beginning of 2011, Pulmatrix hopes to move the '003 compound into a Phase III study in patients with symptoms of seasonal flu, he added. The company's ongoing goal is to generate significant human safety and efficacy data "and then use that as a springboard" toward a partnership, Connelly said.

Two new investors join returning pair

The Series B round was led by new investors ARCH Venture Partners and Novartis Bioventures Fund, each of which received a seat on the Pulmatrix board, along with returning investors Polaris Venture Partners and 5AM Ventures. Of the total, Connelly said about $7 million is bridge funding the company already has burned through, plus an additional $23 million for the ongoing work.

Pulmatrix declined to say whether the financing was a step-up round, other than to note in an e-mail exchange that "we were happy with the valuation and financing terms."

In addition to completing the flu study, the funds will enable Pulmatrix to launch studies of '003 in chronic obstructive pulmonary disease and asthma, with the latter trial, also Phase 1b/2a, expected to begin by the end of 2009.

"The primary endpoint there is safety because we want to test our formulations in compromised lungs...that are prone to bronchospasm," Connelly said. But the trial also will investigate whether '003 can impede the progress of allergens to the cellular level, by exposing asthma patients to specific allergens to which they are allergic.

"We'll treat them and then challenge them with the allergen," explained Connelly. "And then we look at how they have responded not only to the drug but also whether we are seeing either less reactions to the allergen, or a less severe reaction or a shorter duration reaction."

Meanwhile, the biotech also received a $2.2 million grant from NIH's National Institute of Allergy and Infectious Diseases, which will support ongoing preclinical studies to extend the spectrum and efficacy of '003.

To date, in preclinical studies, the compound has demonstrated efficacy in both treatment and prevention in multiple flu strains, including improvement of clinical signs and lung pathology in animal models infected with the H1N1 strain.

The NIAID money also will enable Pulmatrix to advance next-generation formulations of its compounds into toxicology studies that should lead to investigational new drug applications (INDs). Currently, investigational '003 is being dosed in a liquid format that requires a nebulizer for administration.

Pulmatrix hopes to develop both a more convenient and potent liquid formulation of the drug, along with a dry powder version that a patient could self-administer with one or two puffs from an inhaler, Connelly said.

-Joseph Haas ([email protected])