SoCal's Laguna Shuts Down After Heart Drug Presents Unseen Safety Concerns

SoCal's Laguna Pharma Shuts Down After Heart Drug Presents Unseen Safety Concerns
December 7, 2015
By Mark Terry, BioSpace.com Breaking News Staff

Ten months after completing a Series B financing round worth $30 million, La Jolla, Calif.-based Laguna Pharmaceuticals has shut its doors.

About ten years ago, a Cleveland, Ohio-based company, ChanTest, a company that offered testing services to drug developers to assess cardiac risk, bought a compound called 1,4-dialkylpiperazine derivative (Vanoxerine) to treat atrial fibrillation. ChanTest spun out ChanRx in 2006 to develop the drug. In 2011, it acquired $5 million from Santé Ventures and company founder and chief executive ArthurBuzzBrown.

In 2013, the company showed promising results in Phase II clinical trials. More than 75 percent of patients given the highest dose of Vanoxerine shifted to a normal heart rhythm in 8 hours, and 84 percent within 24 hours. At that time, the company reported, “No episodes of monomorphic or polymorphic ventricular tachycardia were seen.”

It was at those results that the company raised $30 million in Series B, recruited Bob Baltera as chief executive officer, moved to La Jolla, and changed the company name to Laguna Pharmaceuticals. Prior to joining Laguna, Baltera headed Amira, which eventually sold to Bristol-Myers Squibb in 2011 for $475.

“ChanRx came out of the biotech venture era where there was this love affair with single asset companies,” Baltera told Xconomy. Although that allows for putting all your focus and resources in one area, it’s also gambling on one bet.

Only two months into its Phase III trial, dubbed Restore SR, Laguna Pharma started noting some side effects that are currently unidentified at this time, but which Baltera describes as “safety signals.” The trial had about 600 patients in it.

Baltera and the company, analyzing their options, felt that there were primarily two: narrow the market for the potential drug by narrowing its target audience, or bailing. “The normal response in this business is to find a way forward,” Baltera told Xconomy. “But it just wasn’t going to be commercially viable. Rather than trying to find any path forward, we decided to shut the company down.”

The company has declined to disclose financial details of the decision except to note that not all the money had been spent. Depending somewhat on the nature of the side effects, it’s possible some other company will decide the drug is worth another shot and might pick it up. Otherwise, Laguna Pharmaceuticals is no more.

The company employed eight people, some who were part-time employees, but it was apparently a straightforward decision. The management team recommended closing the company to the board, and they agreed.

“If you’re going to fail, you want to fail quickly, right?” Baldera told Xconomy. “We didn’t fail. The drug failed.”

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