07 Mar ZyStor seeks to raise $15M for clinical trials
Wauwatosa, Wis. – Looking to raise more venture capital for clinical trials, ZyStor Therapeutics will be one of 30 firms presenting at the annual InvestMidwest venture capital forum next month in Overland Park, Kan.
ZyStor, which also presented at the 2006 forum, would like to raise an additional $15 million or more in anticipation of Phase I clinical trials that are set to begin in early 2008.
The company, located in the Technology Innovation Center at Milwaukee County Research Park, is working to develop enzyme replacement therapies to treat rare genetic disorders known as Lysosomal Storage Diseases.
ZyStor will be armed with new scientific data to present at this year’s InvestMidwest forum, stemming from successful animal tests conducted at the University of Florida for the treatment of Pompe Disease, a genetic disorder caused by a deficiency in the enzyme needed to break down glycogen.
“We’ve gotten good results there and plan to present them at the conference,” said Loren G. Peterson, president and CEO of ZyStor. “It was a very important milestone for us and a key cornerstone of our development program.”
The company already has the support of several prominent Midwest investors. The next round of funding would follow one completed in September 2004, when Mason Wells and Venture Investors led a syndicate of seven venture funds that participated in an $8.5 million financing round.
The syndicate also included Prolog Ventures, the State of Wisconsin Investment Board, Hexagon Investments, Apjohn Ventures, and Stonehenge Capital.
ZyStor moved to Milwaukee from St. Louis as a condition for the funding. It had moved to St. Louis from Cambridge, Mass.
Rarified space
In developing its response to Lysosomal Storage Diseases, ZyStor is targeting a class of more than 40 genetic diseases, each caused by the lack of a specific lysosomal enzyme in human cells that impairs cellular and tissue function, and causes painful disabilities. Such disabilities are rare, but those afflicted can die at an early age.
Existing drug therapies have proven inadequate because too few of the therapeutic enzymes infused into patients are delivered to critical tissues, and patients must have large intravenous doses on a frequent basis.
With ZyStor’s therapy, called Glycosylation Independent Lysosomal Targeting or GILT, a peptide tag replaces a chemical component found on some of the enzyme’s carbohydrates. The tag is embedded within the therapeutic enzyme to promote internalization into the cell, targeting the enzyme to the lysosome and prolonging the life of enzymes in the bloodstream.
In addition to the experiment in Florida, more animal studies are underway, including a study at St. Louis University for the treatment of Fabry Disease, which is caused by the lack of the enzyme needed to metabolize lipids.
Double dipping
Daniel Broderick, managing partner at Mason Wells, has said the success of the animal studies are considered critical to ZyStor’s ability to raise additional capital.
John Neis, co-founder and managing partner of Venture Investors, is impressed with the progress ZyStor has made, especially given the fact that developing a pharmaceutical product is a high-risk proposition.
“The company certainly has made wonderful progress,” Neis said. “We’re excited about how they are advancing down the development path.”
Typically, the existing syndicate of investors will participate in subsequent rounds, and the beneficiary will attempt to lure additional investors. ZyStor’s next chance to impress financiers will come April 10 and 11 at InvestMidwest, which is expected to attract up to 300 of the nation’s top venture capitalists, investors, and bankers.
Peterson lauded the financial support ZyStor has received thus far, but he knows it’s time to tap others in the capital market. “We’re going to have to double what we raised in the last round,” he said. “If we get a higher valuation, we could raise even more.”
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