Two local startups developing diabetes drugs are being sold to Danish diabetes giant Novo Nordisk A/S.
Calibrium LLC and MB2 LLC, both based in Carmel, have agreed to be sold for undisclosed amounts.
Both companies were developing protein-based diabetes drugs that came from research led by Richard DiMarchi, a chemistry professor at Indiana University’s Bloomington campus and the former vice president of research and development at Eli Lilly and Co.
DiMarchi’s team has been behind several previous drug companies, including Marcadia Biotech, which was sold to Switzerland-based Roche in 2010 for a minimum of $287 million.
Calibrium is headed by Fritz French, the former CEO of Marcadia Biotech, and several other Marcadia alumni.
MB2’s CEO is Kent Hawryluk, who was a co-founder of Marcadia and served as its vice president of business development.
Neither company was very old. Calibrium formed in 2012 and then raised $1.7 million in investment capital in late 2013.
“It’s relatively quick, I have to say. It was a great opportunity,” French said of the offer from Novo, which has about $16 billion in annual revenue, all of it from medicines related to diabetes and obesity. French called Novo a good fit.
MB2 was formed last year and raised $1.5 million by December, with plans to raise as much as $4 million. It was working on drugs aimed at diabetes and obesity.
Hawryluk said his small team at MB2 was "very happy" and that he hoped the sale to Novo leads to more investment in life sciences startups in Indiana.
David Kliff, a former Wall Street analyst who now publishes a newsletter called Diabetic Investor, said the decision to buy these companies indicates Novo really liked what it saw.
“Novo is actually pretty good at finding diamonds in the rough so to speak—they wouldn't buy these companies without doing their homework first,” Kliff wrote in an email. “This tells me they believe they really have something that stands a chance—if they felt 50/50 they would have just partnered with them.”
DiMarchi’s team will integrate its work with Novo's after the sales close in the third quarter, DiMarchi wrote in an email on Thursday. But he said the details on how that will happen are not yet clear.
In a statement issued by Novo, DiMarchi said of Novo, “Their intense focus on metabolic diseases, which over the years has led to numerous breakthrough protein-based medicines, aligns perfectly with my career-long priorities. I'm optimistic that together we can create novel, transformative therapies in the fight against the global epidemic of diabetes and obesity."
About 10 of the 20 scientists in DiMarchi’s lab were working on Calibrium’s drug candidates, which were short-proteins known as peptides, as well as insulins, said French, the Calibrium CEO. MB2, which had assets at the clinical stage of testing, was not sponsoring research in DiMarchi's labs, Hawryluk said.
French said he would likely step aside as Calibrium CEO, after a transition period. But he hopes the sale of Calibrium and MB2 help create more entrepreneurial activity in the life sciences sector in Indiana.
“It’s just another sign that there is rich scientific talent here in Indiana,” he said. “I just hope it builds on successes.”