Startups, Venture

Biotech spinout grabs $46M round, jumps straight into PhIII with a drug/device combo for rare lung condition

Jens Stegemann, CEO

The German aerosol therapy company PARI Pharmaceuticals is spinning out a Phase III effort to develop a drug/device combo that matches an inhaled formulation of an immunosuppressant with a remotely monitored delivery device to treat a rare lung condition. And it’s recruited a trio of European venture groups, including Sofinnova Partners in Paris, to back a €43.5 million (about $46 million) round to boot it up to regulators on both sides of the Atlantic.

The idea is simple. Investigators will use an aerosolized version of liposomal cyclosporine A, delivered through a nebulizer with remote monitoring technology from PARI to evaluate its effect on Bronchiolitis Obliterans Syndrome, or BOS, a lethal orphan respiratory disease involving lung transplant rejection. This version of the immunosuppressant is designed to concentrate the therapy in the lung, where it’s needed to prevent graft rejection.

The work is based on research already conducted at PARI — which has been doing research work with inhaled liposomal cyclosporine A for years — along with guidance from lung transplantation expert Aldo Iacono at the University of Maryland. The company will be based in Munich and Frankfurt.

Gimv and Sofinnova Partners co-led the round for Breath Therapeutics and were joined by Gilde Healthcare.

Graziano Seghezzi, a partner at Sofinnova, says the deal fits into their sweet spot for new investments. It aims straight at a critical stage of development under an experienced team that has developed data on the program, some of which is about to be published. Right now, he tells me, it’s too early to say just how long it will take to complete Phase III, as the biotech is still “deep in conversations” with the FDA. And, he adds, it’s possible that the company may go on to work on additional projects, some of which are currently under review.

PARI business development exec Jens Stegemann is taking the helm as CEO of the spinout, which plans to go straight into Phase III studies in Europe and the US, with an eye to taking the pivotal data to the FDA and EMA.

Said Stegemann:

Our strategy is to deposit high concentrations of an immunosuppressive agent directly into the small airways of the lung. With this top-tier group of investors and the best international lung transplantation centres supporting us, we now are in an excellent position to achieve ground-breaking improvements in the combat of BOS.

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