Versartis grabs $21M Series B, aims to begin study of once-monthly hormone therapy

Investors have injected a $21 million second round of venture money into Versartis, a company that focuses on long-acting release treatments for endocrine disorders. With the new round, the Mountain View, CA-based firm says it plans to begin a Phase I study of its lead candidate VRS-317--a once-monthly formulation of recombinant human growth hormone--in patients with a deficiency of the hormone.

New Leaf Venture Partners led the financing. The round also included new backer Advent Venture Partners and previous investors Index Ventures and the biotech firm Amunix, which licenses its XTEN technology for extending the half-life of drugs to Versartis. The start-up expects to begin the Phase I study of VRS-317 during Q1 2011.

In related news, there's a new biotech spinout from Versartis. Amunix and Index Ventures are backing another Mountain View-based company, Diartis Pharmaceuticals, which is taking over development of VRS-859 (exenatide-XTEN) from Versartis. The experimental treatment, a once-monthly form of Amylin Pharmaceuticals' diabetes drug Byetta, is being tested in a Phase Ia study of patients with Type 2 diabetes mellitus who get a single injection to help control their blood sugar.

The new start-up offers a vehicle to commercialize Amunix's XTEN technology for making drugs last longer. Like good old polyethylene glycol (PEG) attachment, XTEN technology is added to a protein drug to extend its half-life and improve its stability in the system. Yet PEGylated drugs require a chemical conjugation step that can introduce inactive variants and increase costs of making the treatments, according to Versartis. XTEN is a chain of natural amino acids that are made in a recombinant process that could be done at larger scales and at lower cost than manufacturing PEG. 

Diartis might help prove the virtues of this technology in humans. In the second quarter, the firm expects results of its initial VRS-859 study, which is testing the safety of the treatment and its ability to help control blood sugar levels in T2DM patients over the course of a month after one injection. And later this year, Diartis is planning to study the treatment in a Phase Ib trial that compares VRS-859 to Byetta. 

- check out the Versartis release
- here's the Diartis release
- read the InVivo Blog piece

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