Ex-Marcadia execs raise $1.7M to launch drug firm

They’re at it again.

Fritz French French

Fritz French and Richard DiMarchi have teamed up to launch another biotech company—and they’ve raised $1.7 million to help get them started.

French and DiMarchi were two of the leaders of Marcadia Biotech Inc., which developed diabetes drugs. They sold the company for $287 million to Switzerland-based Roche in late 2010.

Now, three years later, French and DiMarchi are using their new company, Calibrium LLC, to run the same kind of play.

Richard DiMarchi DiMarchi

In November, Calibrium struck a deal with Indiana University to fund 10 researchers in DiMarchi’s chemistry lab in Bloomington. Then in December, Calibrium secured convertible debt investments from two of the venture capital firms that backed Marcadia—San Francisco-based 5AM Ventures and Seattle-based Frazier Healthcare.

“Call it getting the band back together,” said French, a former manager at Eli Lilly and Co. and Guidant Corp., who is running Calibrium from his home on the north side of Indianapolis.

Calibrium has hired Kristin Sherman as its chief financial officer; she held the same position at Marcadia.

sherman-kristin-mug Sherman

French said he expects more members of the Marcadia team to also join Calibrium as its work advances.

Calibrium will try to turn DiMarchi’s latest research into injectable diabetes drugs. But beyond that, French said, it was too early to talk about the technology the company hopes to develop.

DiMarchi, who is a prolific inventor, has applied for about 50 patents since the sale of Marcadia. His most recent patent applications, according to the U.S. Patent & Trademark Office, focus on glucagon-based peptides. Glucagon is a hormone produced in the pancreas that raises blood sugar levels—essentially the opposite function of insulin, which lowers blood sugar. Glucagon-like peptides can control blood sugar by inhibiting the release of glucagon and stimulating the release of insulin.

And DiMarchi knows a thing or two about developing drugs. Before joining IU in 2003, he was Indianapolis-based Lilly’s vice president of research and development.

French said the Marcadia team wanted to launch another company immediately after selling Marcadia to Roche. But an effort to license one of the molecules that had been part of Marcadia’s portfolio failed to work out. And DiMarchi was prevented from launching a competing company for about two years.

But now the time is right, French said.

“I feel like I’ve got a lot of gas left in the tank,” said French, 55. “And I enjoy doing this.”

Seeing life sciences entrepreneurs that have had a successful exit event start new companies is critical if Indianapolis hopes to develop a thriving life sciences cluster, said Jack Pincus, an Indianapolis-based consultant to life sciences firms.

“We need people that are starting companies if we’re going to build a strong entrepreneurial ecosystem,” said Pincus, who was doing technology transfer work for IU when DiMarchi helped found Marcadia in 2006. “But we just don’t have enough stuff going on here, we don’t have a critical mass, to really see that at a level that’s meaningful.”

Indeed, Calibrium is just the second major life sciences company launched in the Indianapolis area by a successful team from a previous venture.

The other major local example is Nico Neuro Corp., which was launched in 2008 by a chunk of the team that grew and sold Suros Surgical Systems Inc. for $248 million to Massachusetts-based Hologic Inc. Nico has raised $20 million from investors—including nearly 90 angel investors—and has put its minimally invasive neurosurgery products into use at such hospitals as IU Health and St. Vincent Health.

In addition, in Warsaw, Nextremity Solutions Inc., which raised $10 million last year, is led by Rod Mayer, a former DePuy Orthopaedics executive who previously launched DVO Extremity Solutions and sold it in 2007.

Jim Pearson, the CEO of Nico, said growing, selling and starting new life sciences companies doesn’t happen at the same quick pace as it does in the information technology sector. But he’s encouraged by the Calibrium example that Indianapolis is starting to see that kind of activity.

“I think it’s very significant,” Pearson said of Calibrium. He acknowledged that the success stories at Suros and Marcadia could be interpreted as happenstance. “But what isn’t happenstance is that a lot of our angel investors have continued to invest. And that is real. And I feel really good about that.”•

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