January 10, 2012

Mass High Tech

Hydra Biosciences trial launch triggers $5M milestone pay

Hydra Biosciences Inc. and Cubist Pharmaceuticals Inc. (Nasdaq: CBST) said they plan to start a Phase 1 clinical trial for an experimental pain and inflammation drug on which they are collaborating, triggering a $5 million milestone payment to Hydra from Cubist.

The two companies started the collaboration in 2009. Cubist of Lexington agreed to give Cambridge-based Hydra an upfront payment of $5 million to develop Hydra’s human Transient Receptor Potential Ankyrin repeat 1 ion channel drug candidate for pain management and inflammation. The initial deal provided for up to $5 million per year over two years to support Hydra’s internal development of TRPA1, with an option to renew. Hydra could also receive potential development milestones and royalties on products produced from the joint program.

Hydra CEO and President Russell Herndon told Mass High Tech that the research collaboration ended its initial phase in October, but it has been renewed through December 2012, with an option to renew it annually. The companies also have an ongoing licensing agreement covering TRPA1 and other compounds.

The companies said the Phase 1 trial is the first step in a clinical development program designed to evaluate the potential of this TRPA1 investigational product to treat acute pain and certain inflammatory conditions. Under the collaboration, the companies recently identified and completed preclinical testing on a potent, selective TRPA1 antagonist, CB-625 (full name CB-189,625). They also filed for regulatory approval to initiate human clinical studies.

The open-label, dose-escalation study will assess the safety and pharmacokinetics of CB-625 in healthy volunteers. It will be conducted in The Netherlands and is expected to start in the first quarter of 2012. Herndon said Cubist is paying for and handling the trials.

“Cubist is covering 100 percent of the development and research costs,” he said. If the drug is approved, Cubist will handle sales and marketing, and Hydra will get royalties and other payments.

Herndon said that he believes the drug candidate, which is the most advanced of Hydra’s internal programs, may one day be able to impact the way doctors manage peri-operative pain and reduce reliance on opioids, which have many side effects.

Ion channels are transmembrane proteins that help the flow of ions (positively and negatively charged molecules) into and out of the cell. They have been implicated in many diseases, including hypertension, cardiac arrhythmias, gastrointestinal disorders, cystic fibrosis and pathological pain.

Hydra also is working on additional programs, including TRPV3 and TRPC5, in house, but would welcome a partner. Herndon said he is talking to potential partners while attending the JP Morgan Healthcare Conference currently underway in San Francisco, Calif. “We’re not officially looking for cash, but non-dilutive funding through partnerships is always a good thing,” he said.

The company, which employs 30 people, last raised money in 2009, when it pulled in $22.2 million in a fourth venture funding round led by MedImmune Ventures, bringing its total funding raised to $69 million. MedImmune Ventures joined previous investors Advanced Technology Ventures, Abingworth, Polaris, BioVenture Investors, Biogen-Idec Ventures, and Lilly Ventures in the Series D financing. In March 2008, Hydra closed on $34 million in its Series C round of funding.

Cubist shares were up nearly 2 percent in mid-day trading today at $40.75.