The team that built Addrenex Pharmaceuticals from startup into a $29 million exit without raising a dime of venture capital is making another run with a new company – Aerial BioPharma.
Morrisville, North Carolina-based Aerial is focused on central nervous system therapies. Its CEO is Moise Khayrallah, a pharmaceutical industry veteran of 23 years who was CEO of Addrenex before its 2009 acquisition by Sciele Pharma. Aerial has commenced a fundraising effort targeting $12 million, according to securities filings. Khayrallah did not return calls seeking comment.
Khayrallah’s former company, Durham, North Carolina-based Addrenex was founded in 2006 supported by angel investment and loans from the North Carolina Biotechnology Center. The company’s lead drug candidate was Clonicel, a compound being developed as a treatment for hypertension treatment as well as attention deficit hyperactivity disorder. Although Addrenex raised no venture capital it did strike licensing deals with Atlanta company Sciele Pharma, now a subsidiary of Japanese pharmaceutical company Shionogi. In 2007, Sciele licensed Clonicel for $6 million paid to Addrenex up front, plus milestones and royalties.
With that $6 million Addrenex then licensed a pipeline of compounds from the University of Nebraska Medical Center. Khayrallah later told the Wall Street Journal he hoped that venture capital investment into Addrenex could advance that drug pipeline into new treatments for conditions such as hypertension, ADHD, and pain, among others.
VCs didn’t bite but the company’s partnership with Sciele continued to prove fruitful. In 2008, Addrenex signed a $27 million licensing deal with Sciele for another compound being developed as a hypertension treatment. In 2009 Sciele decided to acquire Addrenex outright for $29 million.
Following the Addrenex sale, Khayrallah and the former Addrenex management team formed CNS therapies company Neuronex. Last October, Neuronex raised $1.5 million from the original angel investors who supported Addrenex. The company also received a $250,000 Small Business Research Loan from the North Carolina Biotechnology Center. Neuronex is currently in phase 2 clinical trials with a drug candidate being studied as an epilepsy treatment.
Aerial was launched in January as a yet another CNS company led by Khayrallah joined by the same team that led Addrenex and currently leads Neuronex. Aerial has not disclosed what compounds, if any, it has in development. But it looks like Aerial is still preparing for takeoff; the company shares office space and the phone number of Neuronex.
Neuronex does not work in drug discovery. Its business model is to find suitable compounds and in-license them – that’s what the company did for the epilepsy candidate currently in clinical trials. If Aerial will pursue the same strategy, the company could be looking to raise that $12 million to arm itself for some deals. A $12 million sum is a little too steep for angel investors. Khayrallah probably has venture capitalists in mind. Maybe this time they’ll listen.
Photo from Flickr user Images_of_Money