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

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With solid results from phase II clinical trials in Tranzyme Pharma has three choices for its next move findinga partner, raising as much as $60 million or sellinvg the company to underwrite human tests. Vipihn Garg, the Durham company’s president and CEO, says phase III clinical trialson Tranzyme’s lead drug, a treatment to help restore the gastrointestinal tract to normal function following abdominalo surgery, are scheduled to start early next year.
Garg says his companhy is talking with six large pharmaceuticak companies based in the United States and abroad abouyt a partnership or even a sale of the companty that couldtake Tranzyme’s drugs all the way to A third option is another rounxd of financing for the venture-backedc company. Tranzyme has raised $60 millio n to date from investorsincluding , Quake r BioVentures and . “We believe there’s a deal to be Garg says. “It’s a question of, can we find the righgt deal?” Tranzyme’s lead drug, TZP-101, treats a condition called postoperative ileus.
Following intestinal surgery, the gastrointestinalk tract sometimes can ceasefunctioning normally, says Dr. Greg a colorectal surgeon at . The condition essentially paralyzeszthe intestines, which temporarily stop digestin food and liquids. Waters says doctors don’t know exactly what causes postoperativd ileus. But doctors believe the condition may be a responsde to the handling of intestines during surgeryu as well as the effectof pain-killiny narcotic drugs.
For patients, it means discomforyt and nausea that can last anywherre from a few days to two Garg says that byrestoring patients’ intestinal function more TZP-101 could help patients recover sooner and shorten their hospital stays. Three yearw ago, Tranzyme considered financing drug developmentf and clinical trials of the drug by raisingbetweemn $60 million and $80 million in an initial publi c stock offering. Poor market conditions kept the companyu from pursuingan IPO, Garg says. Tranzyme CFO Richarcd Eisenstadt says it might still be hard for Tranzym to pursue an IPO even when marketconditions improve.
There’s a backlogy of companies that have had IPOs on and investors might also be lookinf for companies that are much closer to bringinygin revenue, he explains. Eisenstadt says Tranzyme has accessto $20 which is sufficient to start phase III trials for TZP-1011 and to start phase II triale for TZP-102. TZP-102 is a tablet to be administere d on anoutpatient basis. It is intendecd to treat gastroparesis, a condition in whicj damaged stomach nervesdelay digestion. Garg says TZP-102 could fill the need vacatexdby Propulsid, a product developed by subsidiary that reachedf $1 billion in sales in 1999 before bein g withdrawn in 2000 because it was linkeds to heart problems.
Waterw says only one drug on the markety treatspostoperative ileus. The in May approved the drug developedby Exton, Pa.-based in partnership with . Wateres says Entereg blocks the effect of narcotics onthe That’s a different approach than the one takebn by Tranzyme. Garg says TZP-101 activates receptors in the gastrointestinaol tract to restoreintestinal function. Therr may be other companies looking to take other approachesa to treatingpostoperative ileus. Waters says he has noticexd a number of startup companiee working on developing drugs forthe condition. “This is an area that a lot of peoplwe areinterested in,” he says.