Scoop: With investor interest dried up in microbiome therapies, DermBiont pivots to other topicals and nears close of Series B

18 Oct 2022
endpts.com
CollaborateSmall molecular drugAcquisition
DermBiont axed trials of its original lead dermatology gel, the biotech confirmed to Endpoints News, and with little investor appetite for microbiome-based therapies, the company is raising a Series B to bankroll studies of other topicals it acquired in recent years.
The Boston biotech — led by Karl Beutner, a former CMO of atopic dermatitis drugmaker and Pfizer-acquired Anacor Pharmaceuticals — is ending work in eczema and halting plans in athlete’s foot and onychomycosis, a fungal infection in toenails and fingernails, chief business officer Nick Eliovits told Endpoints.
Scoop: With investor interest dried up in microbiome therapies, DermBiont pivots to other topicals and nears close of Series B
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Source: Endpts
Karl Beutner
For now, the private upstart is focused on bringing forward small molecule topicals for seborrheic keratosis, sunspots and melasma. The AKT inhibitor gel, known as SM-020 and brought into the DermBiont fold via a 2020 acquisition of SeylanMED, passed a Phase II in seborrheic keratoses, the company said in June.
After disclosing a $28 million “Series A2” last December, DermBiont has raised at least $3.3 million more, according to SEC filings from January and last month. Eliovits said he anticipates DermBiont will announce “a significant financing in the coming” weeks or months, noting the round will be billed as a Series B.
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That will get the biotech into Phase III studies for its revamped pipeline, which includes SM-020 and PKC-beta inhibitor SM-030. Multiple mid-stage studies are on tap for next year ahead of late-stage clinical trials in 2024, he said. SM-030 is currently in a 75-patient Phase II study for photodamage hyperpigmentation.
SM-020 will go through another 105-patient Phase II in SK next year, and SM-030 will go through a 150-patient study in melasma, a spotty skin condition, pending the photodamage trial results, Eliovits said.
“People want to be able to be monochromatic and solve their hyperpigmentation issues, and we have a topical there that hits the root cause and it blocks PKC beta, which is required for the phosphorylation of tyrosinase which regulates melanin production,” he said of SM-030.
DermBiont acquired SM-030, or ruboxistaurin, via its purchase of Chromaderm, announced at the same time as the Series A2 last winter. Chromaderm was founded by the same executive as five other biotechs, all of which merged with Phoenicis Therapeutics, Endpoints reported last week.
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The goal with SM-030 is to provide a topical in the face of a federal decision to take OTC hydroquinone off the market as part of the CARES Act.
“I think that if somebody had a safe product that they could use,” Eliovits said, “it would really add a lot of value and improve a lot of patients’ lives and make sure people aren’t using junk on their face, so that’s why we took the decision there.”
The clinical development pruning came in late August or early September, Eliovits said, pointing to a variety of factors.
DermBiont went through the Illumina accelerator program and emerged in 2017 with IP out of James Madison University. The goal was to develop microbiome-based therapeutics that were the result of research that identified bacteria that produces anti-fungal metabolites, Eliovits said.
But the biotech ran into hurdles during the pandemic, when Covid-19Covid-19 hampered trial sites and the company was forced to halt studies in athlete’s foot and AD.
By the time DermBiont regrouped to try a turnaround, during which those two acquisitions were being made, the upstart ran faced an uphill battle. Competition in atopic dermatitis drug R&D heated up, athlete’s foot was viewed by funders as a “retail OTC indication” and microbiome companies flopped, Eliovits said, with the latter reasoning exemplified by the shuttering of Kaleido Biosciences earlier this year. Eliovits is also a managing partner at Olive Tree Capital, a fund that helped bankroll Kaleido.
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“[I]nvestors are depleted and have zero interest in microbiome therapeutics,” he said. If the microbiome whets investor appetite again, the company could consider returning to DBI-001DBI-001 and DBI-002, its original therapies, he said.
Of course, if DermBiont had infinite dollars, the programs would’ve still been in the clinic, Eliovits said. The trial stoppages were disclosed on the federal clinical trials database in recent weeks and the two DBI assets were removed from the company’s public pipeline webpage in recent months, according to internet archives.
In addition to Olive Tree, DermBiont’s backers include Pivotal Life Sciences, Viking Global Investors, Toba Capital and Civilization Ventures, among other undisclosed funders.
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