Sparrow Pharmaceuticals won the therapeutics category as part of this year’s Best of INVEST awards.
Corticosteroids are an important anti-inflammatory treatment agent for a variety of medical conditions – ranging from autoimmune to cancer to organ transplants. However, chronic use of these drugs can lead to a similarly wide range of side effects.
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Sparrow Pharmaceuticals has brushed the dust off a compound of another company’s drug – it won’t say which – and found that it works as a way to improve the potency of corticosteroid. It’s acquired exclusive global rights to a patented investigational drug, which when added to a corticosteroid like prednisone has potent anti-inflammatory tendencies, said Sparrow CEO David Katz.
Initially meant to treat glaucoma, Katz recognized – through nearly two decades of work at AbbVie – that such a formulation could actually be coupled with corticosteroids, and enhance their efficacy.
Sparrow got its hands on two formulations of this drug. One is an oral formulation that’s IND ready, and the other is an eye drop that has already had some testing in Phase 1 trials. It works by altering the distribution of corticosteroids selectively within tissues such as the liver, bone and eye, in which excess levels of these drugs lead to side effects.
The company, still virtual, is looking to raise $8 million in a Series A, and piggyback on that with a $20 million Series B. With that funding, Katz reckons Sparrow can exit.
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Sparrow’s regulatory strategy is to target its combined therapy towards patients that require longterm corticosteroid use. It could also branch into indications like glaucoma, Crohn’s disease, COPD, asthma and other such chronic diseases.
Katz says the market for such a drug could stretch to $10 billion, simply for the oral formulation – largely for the less common diseases it’s initially targeting, like polymyalgia rheumatica and giant cell arthritis.
Katz has a cute reason for why Sparrow Pharmaceuticals is so named – the bird for which the company’s name is “this drab little animal that most of us can overlook, but it can fly.” Similarly, a drug that can up the efficacy of ubiquitous drugs like corticosteroids could, potentially, accomplish great things.
“I found this to be really an off-the-radar opportunity, because it doesn’t fit nicely into a single therapeutic area that would be the focus of portfolio planning for a large pharmaceutical company,” Katz said. “Everyone who had been looking at these sorts of compounds had been looking at them for completely different things.”
