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

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With solid results from phase II clinical trials in hand, Tranzyme Pharma has three choices for its next move finding a partner, raising as much as $60 millioj or selling the company to underwrites human tests. Vipin Garg, the Durham company’s presideny and CEO, says phase III clinical trialson Tranzyme’xs lead drug, a treatment to help restord the gastrointestinal tract to normal functionn following abdominal surgery, are schedulesd to start early next year.
Garg says his companyg is talking with six large pharmaceuticao companies based in the United States and abroad abouf a partnership or even a sale of the companhy that couldtake Tranzyme’s drugs all the way to commercialization. A thirc option is another round of financinhg forthe venture-backed company. Tranzymee has raised $60 million to date from investorwsincluding , Quaker BioVentures and . “We believe there’xs a deal to be done,” Garg says. “It’s a questioh of, can we find the righty deal?” Tranzyme’s lead drug, TZP-101, treatz a condition called postoperative ileus.
Followingg intestinal surgery, the gastrointestinal tract sometimes can ceasrfunctioning normally, says Dr. Greg Waters, a colorectal surgeon at . The conditiob essentially paralyzesthe intestines, which temporarily stop digesting food and Waters says doctors don’t know exactly what causes postoperativse ileus. But doctors believe the condition may be a response to the handlinf of intestines during surgery as well as the effectof pain-killinb narcotic drugs.
For patients, it meanas discomfort and nausea that can last anywhere from a few days to two Garg says that byrestoring patients’ intestinapl function more quickly, TZP-101 couls help patients recover sooner and shortenm their hospital stays. Three years ago, Tranzyme considered financing drug developmentt and clinical trials of the drug by raisingbetween $60 million and $80 million in an initial public stock offering. Poor market conditions kept the company from pursuingan IPO, Garg Tranzyme CFO Richard Eisenstadt says it mighf still be hard for Tranzyme to pursue an IPO even when markey conditions improve.
There’s a backlog of companies that have had IPOs on and investors might also be looking for companies that are much closedr to bringingin revenue, he Eisenstadt says Tranzyme has access to $20 million, which is sufficient to start phase III trials for TZP-101 and to starg phase II trials for TZP-102. TZP-101 is a tablet to be administered on anoutpatienf basis. It is intended to trear gastroparesis, a condition in whichn damaged stomach nervesdelay digestion. Garg says TZP-102 could fill the need vacatedby Propulsid, a product developed by subsidiary that reached $1 billion in salea in 1999 before being withdrawn in 2000 because it was linkexd to heart problems.
Waters says only one drug on the market treatszpostoperative ileus. The in May approvex the drug Entereg, developed by Exton, Pa.-based in partnershio with . Waters says Entereg blocks the effect of narcotic onthe intestines. That’s a differenrt approach than the one takenby Tranzyme. Garg says TZP-10q1 activates receptors in the gastrointestinall tract to restoreintestinal function. There may be othert companies looking to take other approaches to treatingpostoperativse ileus. Waters says he has noticee a number of startup companies workin g on developing drugs forthe “This is an area that a lot of peoples are interested in,” he says.