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Bengaluru: Crystalys Therapeutics said on Tuesday it has emerged from stealth mode with a funding round of $205 million to help finance global late-stage trials of its lead drug as a treatment for gout . The Series A financing round was co-led by Novo Holdings, the controlling shareholder of obesity drugmaker Novo Nordisk , SR One and Catalys Pacific, and had participation from other investors. The company, which had a pre-money valuation of $75 million, had closed an initial investment in June, and had been working with three to four additional investors for a second capital raise, CEO James Mackay told Reuters. Crystalys is accelerating two late-stage trials of dotinurad , a once-daily oral drug being evaluated in the U.S. and Europe as a second-line treatment for gout in patients unresponsive to first-line therapies. "There really is no available second-line treatment for these patients," said Mackay adding that while Amgen's intravenous drug Krystexxa is successful as a third-line treatment, the high price limits it to a small portion of patients. Gout is a type of inflammatory arthritis, which is caused by buildup of uric acid in the body and leads to pain and swelling in the joints. Dotinurad belongs to a class of drugs which block the urate transporter 1 (URAT1) in the kidneys, helping increase the excretion of uric acid and lowering the blood levels of the substance. "Normally, you have to conduct replicate clinical trials, but because of the extensive data that existed, the FDA agreed that we could do two clinical trials, but two different designs," Mackay said. One trial is focused on reducing gout flares, while the other aims to resolve tophi which are large uric acid crystal deposits. The San Diego-based company gained access to the drug from Urica Therapeutics, a unit of Fortress Biotech which originally licensed the drug from Japan-based Fuji Yakuhin. Fuji Yakuhin out-licensed the drug in China and other Asian countries to Eisai. It is approved in China under the brand name Urece. (Reporting by Sriparna Roy in Bengaluru; Editing by Krishna Chandra Eluri)

A team that got a gout treatment approved is coming back together to develop a new medicine for the condition in the US and Europe. Crystalys Therapeutics, the San Diego biotech developing the oral gout drug dotinurad, emerged on Tuesday with $205 million in Series A funds. The company previously raised $23 million in seed funds, CEO James Mackay told Endpoints News. The startup began two Phase 3 trials last month, Mackay said , and the company should have results from the pivotal studies at the end of 2027. Mackay formerly led AstraZeneca’s Ardea Biosciences, which developed a gout drug called Zurampic that received a green light from the FDA in 2015. Crystalys could be a “nice bolt-on acquisition” for a pharma company with interest in rheumatology or I&I, but “that’s not something we’re planning on,” according to Mackay. The company is prepared to take dotinurad all the way to market on its own, he said. The launch of Crystalys is part of an increasingly common trend among biotech investors. They acquire or in-license a clinical-stage drug candidate, build a company around it, stack the C-suite with industry veterans, and then commit a heap of capital for human trials. This time, the acquired asset is already on the market in a handful of countries. Fuji Yakuhin developed dotinurad, which was approved to treat gout in Japan in 2020. Then in December, Eisai secured a regulatory nod in China for the same drug, launching the medicine there this summer as Urece . It’s also greenlit in Thailand and the Philippines. Crystalys has the rights to dotinurad in the US, Europe, North Africa and Middle East after the company licensed dotinurad from Fortress Biotech subsidiary Urica Therapeutics in July 2024. Urica had the license from Fuji Yakuhin. Mackay said the funding should carry the company through the Phase 3 readouts and some small Phase 2 life cycle management studies that it’s still mapping out, Mackay said. After his time at AstraZeneca, Mackay went on to found and lead an inflammatory disease biotech called Aristea Therapeutics, which shut down in early 2023 after safety concerns in clinical studies. Not long after, executives at Aristea’s lead investor Novo Holdings told Mackay that they were “really interested in getting into the gout space,” he said. The team wanted him to start a gout-focused biotech given his experience leading AstraZeneca’s gout work. With the help of Novo Holdings and Catalys Pacific, a biotech fund in Tokyo and Seattle, they conducted a “landscape search of all the gout drugs in development” and evaluated seven or eight molecules before choosing dotinurad, according to Mackay. Crystalys was then able to bring in more investors. Along with Novo Holdings and Catalys, its investors are SR One, Perceptive Xontogeny, Lightstone, AN Venture Partners and more than half a dozen other firms. Catalys founder BT Slingsby serves as board chair. He has co-founded companies like hypertension biotech Mineralys Therapeutics and chronic kidney disease drug developer Pathalys Pharma. In a press release, Slingsby noted “Japan’s excellence in pharmaceutical innovation.” Crystalys is evaluating dotinurad as a once-daily oral drug that inhibits the URAT1 protein, which acts as the “main renal transporter that basically moves uric acid in and out of the body,” Mackay said. Inhibiting that target should lead patients to urinate more uric acid out of their body and, in effect, address the root cause of gout, he said. Gout typically occurs when a patient’s body is unable to excrete enough uric acid. The condition leads to intense pain attacks and big lumps on the joints, which develop as uric acid builds up. It’s the most common type of inflammatory arthritis. The “beauty of dotinurad,” Mackay said, is that it’s already been given to about 1.2 million people in Japan, so there’s ample safety data and there has been “no significant change” in the label in Japan in five years. Crystalys’ experienced team, which includes chief medical officer Nihar Bhakta, wanted a drug that came with no renal toxicities or liabilities, according to Mackay. Dotinurad should be able to avoid those toxicities because it is “highly specific” to URAT1 and not other renal transporters, he said. The company hopes to give gout patients the option to take an oral treatment. Amgen markets an IV-delivered molecule called Krystexxa by way of its $28 billion Horizon acquisition. Zurampic was an oral drug, but it was discontinued after Ironwood terminated its licensing agreement with AstraZeneca in 2018. Like Horizon, Crystalys aims to market the drug as a specialty treatment prescribed by rheumatologists and not primary care physicians, Mackay said. “That makes it very achievable for us a relatively small biotech to launch the drug,” he added.