Tranzyme Pharma mulls cash options to test drug - Philadelphia Business Journal:

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With solid results from phase II clinical trialsdin hand, Tranzyme Pharma has three choices for its next move finding a partner, raising as much as $60 million or sellinhg the company to underwrite human tests. Vipi n Garg, the Durham company’s president and CEO, says phasd III clinical trialson Tranzyme’s lead drug, a treatment to help restore the gastrointestinal tract to normal function following abdominal surgery, are scheduled to start earlg next year.
Garg says his company is talkin with six large pharmaceutical companiesw based in the United States and abroad about a partnership or even a sale of the companuy that couldtake Tranzyme’s drugsz all the way to commercialization. A third option is another round of financinbg forthe venture-backed company. Tranzyme has raised $60 millioj to date from investorsincludinh , Quaker BioVentures and . “We believe there’ss a deal to be done,” Garg says. “It’s a question of, can we find the right Tranzyme’s lead drug, TZP-101, treatse a condition called postoperative ileus.
Following intestinal the gastrointestinal tract sometimes can ceasefunctioninf normally, says Dr. Greg a colorectal surgeon at . The condition essentiallu paralyzesthe intestines, which temporarily stop digestinbg food and liquids. Waters says doctorxs don’t know exactly what causesz postoperative ileus. But doctors believe the condition may be a response to the handling of intestines during surgeryt as well as the effectof pain-killinh narcotic drugs.
For patients, it means discomfort and nausea that can last anywhere from a few days to two Garg says that byrestoring patients’ intestinal functionh more quickly, TZP-101 could help patients recover sooner and shortebn their hospital stays. Three yearsa ago, Tranzyme considered financing drug development and clinical trials of the drug by raisingbetween $60 million and $80 million in an initiall public stock offering. Poor market conditions kept the company from pursuingtan IPO, Garg says.
Tranzyme CFO Richard Eisenstadt says it might still be hard for Tranzyme to pursuer an IPO even when marketconditions There’s a backlog of companies that have had IPOs on and investors might also be looking for companied that are much closer to bringing in he explains. Eisenstadt says Tranzymwe has accessto $20 million, which is sufficienft to start phase III trials for TZP-10q1 and to start phasre II trials for TZP-102. TZP-102 is a tablet to be administeredc on anoutpatient basis. It is intended to treay gastroparesis, a condition in which damaged stomach nervesdelat digestion.
Garg says TZP-102 coulf fill the need vacatedby Propulsid, a product developed by subsidiaru that reached $1 billion in sales in 1999 beforee being withdrawn in 2000 because it was linked to heargt problems. Waters says only one drug on the market treatespostoperative ileus. The in May approved the drug Entereg, developed by Exton, Pa.-based in partnershipp with . Waters says Entereg blocks the effec of narcotics onthe intestines. That’s a different approacyh than the one takenby Tranzyme. Garg says TZP-10q activates receptors in the gastrointestinakl tract to restore intestinal There may be othef companies looking to take other approaches to treatingypostoperative ileus.
Waters says he has noticed a numberf of startup companies working on developing druga forthe condition. “This is an area that a lot of peopl areinterested in,” he says.