Startup gets $7M in funding to test its toenail fungus-fighting micro-insert

In a win for subungual (under the toenail) drug delivery, Laguna Beach, CA's Hallux just completed a $7.1 million Series A that will enable it to conduct Phase IIa clinical trials of its drug/device combination product for toenail fungus, or onychomycosis.

The company believes its micro-insert will increase compliance and reduce side effects compared to systematic oral delivery, and is more efficacious than topical therapies, which don't penetrate the nail effectively.

It will deliver terbinafine, the active ingredient in Novartis' ($NVS) over-the-counter Lamisil, which is available as a cream, spray or spray powder. Terbinafine is also available as a generic tablet, which is typically taken for up to 12 weeks.

"Onychomycosis remains a major market in the United States and abroad that is generally underserved by existing prescription treatment options," said Hallux CEO Mark Taylor in a statement. "The oral therapies carry the risk of systemic side effects while the topical products are associated with underwhelming cure rates and yearlong dosing requirements. Our approach utilizes subungual drug administration that delivers high concentrations of terbinafine directly to the site of infection. In this way, we hope to improve efficacy and compliance with negligible systemic exposure."

Insertion of the device will occur via an in-office procedure. The clinical trials will consist of three proof-of-concept studies, according to MedCity News, which reports that Hallux acquired the technology from an undisclosed startup that unsuccessfully tested terbinafine delivery in clinical trials.

"We feel we have the expertise and intellectual property to improve upon what that company had done," Taylor told MedCity News.

The financing was led by Deerfield Management, whose portfolio includes a variety of drug delivery companies, such as inhaled insulin maker Mannkind ($MNKD), RNAi specialist Dicerna Pharmaceuticals and Titan Pharmaceuticals ($TTNP), the maker of a subdermal implant to treat opioid addiction.

- read the release
- here's MedCity News' take