Pharma, Startups

Type 2 diabetes, OTC weight loss drug maker rounds up $20M for late-stage development

Piggybacking off a $21 million round completed last year, Elcelyx Therapeutics has secured a $20 […]

Piggybacking off a $21 million round completed last year, Elcelyx Therapeutics has secured a $20 million series C to fund late-stage clinical development of its drug candidates for type 2 diabetes and weight loss.

The round was led by GSM Fund LLC with participation from previous investors Morgenthaler Ventures, Kleiner Perkins Caufield & Byers and Technology Partners.

Elcelyx’s proprietary platform is based on what it calls Gut Sensory Modulation, or the stimulation of sensory receptors in the gut that intensify hormones that regulate glucose and trigger the feeling of satiety.

NewMet is a delayed-release formulation of generic metformin, a widely prescribed oral drug that helps control blood sugar levels in people with type 2 diabetes. By focusing the drug on the lower gut, the company thinks it can avoid tolerability issues with the drug caused by systemic absorption.

Meanwhile, Lovidia is a mix of generally recognized as safe ingredients designed to double the body’s production of natural satiety and gluco-regulatory gut hormones to stimulate weight loss. It’s slated for a 2014 launch, according to the company’s website.

Despite a worldwide obesity epidemic, the market for anti-obesity drugs has been risky, demonstrated most recently by lackluster early sales of Qsymia, one of two new weight loss drugs approved by the U.S. Food and Drug Administration last year.

San Diego-based Elcelyx was founded in 2010.

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