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Michigan’s Lycera Corp. raises a $36 million Series A round

The autoimmune drug-maker Lycera will fund testing on two of its drugs. One drug will go through Phase II proof-of-concept studies while another will move into Phase I clinical trials, according to the release.

PLYMOUTH, Michigan — The autoimmune drug-maker Lycera raised $36 million that will fund testing on two of its drugs, the company announced Thursday.

One drug will go through Phase II proof-of-concept studies while another will move into Phase I clinical trials, according to the release.

Lycera develops pills to treat autoimmune diseases like inflammatory bowel disease, lupus and rheumatoid arthritis.  The company is pre-revenue and created three new seats on a now six-member board of directors to secure the money. InterWest Partners, ARCH Venture Partners and Clarus Ventures were joined by previous investor EDF Ventures in this round.

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A Deep-dive Into Specialty Pharma

A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.

Dr. Jeffrey Leiden, Clarus’ managing director; ARCH partner Kristina Burow; and Nina Kjellson, a general partner with InterWest joined Lycera’s board. Members of ARCH and EDF will serve as board advisers.

The company also said it has added a program to focus on Th17 cells, a subset of immune cells that can cause rheumatoid arthritis, multiple sclerosis, Crohn’s disease, psoriasis, but are also a new pathway that can be used to treat those diseases. Dr. Dan Littman, a New York University professor who performs leading research on the Th17 pathway, will lead Lycera’s scientific advisory board.

The company has been a bit of a startup darling in Michigan’s life science community. In 2006 intimated it would leave the state if it didn’t get funding. It then received subsidies the following year: a five-year state tax credit for $499,000 to stay in the Ann Arbor area and create 34 jobs; a five-year, $440,00 subsidized lease at the Ann Arbor SPARK incubator, as well as $150,000 worth of used lab equipment.

Lycera raised up to $3.6 million in the last three years, according to SEC filings. It will first receive $10 million of this latest and get the rest by meeting additional milestones, the company stated.

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