A recently announced transaction had a personal connection for me.
Zafgen Inc., a publicly traded drug company headquartered in Boston, announced Dec. 18 that it was merging with Chondrial Therapeutics LLC, a suburban Philadelphia firm developing a treatment for mitochondrial disorders, currently incurable genetic maladies that afflict thousands of U.S. children a year.
The deal is structured as a reverse merger, giving Chondrial owners control of the combined company.
Chondrial was founded upon intellectual property developed by Dr. R. Mark Payne, a faculty member at the Indiana University School of Medicine. Intellectual property of the company was licensed from IU and Wake Forest University. I served on the board of Chondrial. And as the parent of a child who had a mitochondrial disorder, the progress Chondrial has made has been very exciting.
Chondrial was founded in Indianapolis in 2013, by Payne and CEO Steve Plump, a former Lilly executive. I joined the board with an angel investor, Tom Hamilton, who also had an affected child. The goal of the company was to develop a drug for a rare form of mitochondrial disorder, Friedreich’s Ataxia, which predominantly affects children and young adults. In FA, a key protein, Frataxin, is missing from the mitochondria inside cells.
The function of mitochondria is to provide energy for cells in the body, and they are present in high concentrations in energy-dependent organs, such as the brain, heart and muscle. The clinical manifestation of FA is a progressive loss of neurologic functions, such as the ability to walk and control body motions, as well as progressive development of a fatal heart disease. Patients with this disease frequently die as young adults. Other forms of mitochondrial disease are also frequently fatal, due to the impact on high-energy-demand organs.
The angel investment allowed the company to commercially manufacture and test its new drug in animals. Based on these findings, Payne and Chondrial in 2015 were awarded a highly competitive grant from the Therapeutics for Rare and Neglected Diseases program at the National Institutes of Health. The purpose of this grant was to further the preclinical development of the drug to the point of application to the U.S. Food and Drug Administration for clinical trials. In addition to contributing to the development of the drug, this award raised the public profile of the company, resulting in multiple discussions with investment firms.
In December 2016, Deerfield Management Co. invested about $25 million in Chondrial to pursue the development of its lead drug asset, by then known as CTI-1601, which delivers the protein Frataxin to protein-deficient mitochondrial cells in the body. The Chondrial board selected Deerfield as its partner due to the shared devotion to getting the drug approved and to market in the shortest possible time. At the time of the Deerfield investment, Chondrial relocated to the Philadelphia area. Investors have since invested significant amounts of additional capital.
The transport mechanism used to deliver the missing protein to the mitochondria is novel. The missing protein is bound to a small cell-penetrant peptide that has the ability to cross into tissues and cells, pulling the Frataxin with it. Once inside the cell, the protein is internalized within the mitochondria, where it is processed and the Frataxin released. This concept has broad application to other diseases, and will hopefully provide a platform to develop new drugs for other mitochondrial diseases that have no significant therapies today.
After several years of preclinical testing in animals, Chondrial in 2019 was granted an investigational new drug application by the FDA. CTI-1601 is in Phase I clinical trials in humans, has been granted Rare Pediatric Disease status and is being reviewed by the FDA pursuant to fast-track evaluation. Chondrial also hopes to use its protein replacement therapy platform to design other fusion proteins to target additional orphan diseases, characterized by deficiencies in intracellular bioactive compounds.
All of this progress was based on the work of Payne, at the IU School of Medicine and during his previous engagement at Wake Forest University.
The merger is expected to close in the first half of this year. The company then will be known as Larimar Therapeutics Inc., and its headquarters will remain in suburban Philadelphia. But with some luck, children with certain types of mitochondrial disorders will have cause for hope.•
Neff is of counsel at Bingham Greenebaum Doll and a senior adviser to Evolution Capital Partners.