Portfolio News
Spinoff Lycera raises millions
Auto-immune disease drugs being developed
The Ann Arbor News
16 April 2009
A University of Michigan spinoff company developing drugs to treat auto-immune diseases has raised $36 million in potential venture capital funding, it announced today.
The startup funding is the second largest venture capital deal for a company at this stage in Michigan in nearly a decade, according to analysts who track venture capital.
Lycera Corp. is developing two drugs to treat auto-immune diseases, such as rheumatoid arthritis, lupus and inflammatory bowel disease. Lycera plans to make the drugs in pills or capsules.
Such diseases are now typically treated by using injections or other methods and can compromise the immune system, said Gary Glick, company founder and chief scientific officer. Glick is also a U-M chemistry professor.
Lycera's drugs could be a cheaper and easier way for patients to get their medication, he said.
Of the $36 million Lycera has raised, the company has already received $10 million. The rest of the money will be disbursed when the company hits certain milestones.
The company is working to move forward with clinical trials and plans to hire at least six people in the next few months, including chemists, immunologists, biologists and certain management team positions, Glick said.
The funding Lycera raised is significant for a Michigan-based pharmaceutical company, said Emily Mendell, a spokeswoman for the National Venture Capital Association. It would be the second-largest Series A venture capital round in Michigan since 2000, according to the association's records.
The announcement is positive news for Michigan, said LeAnn Auer, executive director of the Michigan Venture Capital Association.
"The size of the deal and the fact that it happened validates the fact we have high-quality investment opportunities in Michigan, particularly in the life sciences," Auer said.
InterWest Partners, Clarus Ventures and ARCH Venture Partners are among the groups investing in Lycera. Ann Arbor-based EDF Ventures, which provided seed financing, is also participating.
After hiring several former local Pfizer Inc. employees - seven of Lycera's nine employees previously worked for Pfizer - the company was awarded $400,000 from the Company Formation and Growth Fund, distributed through the state's 21st Century Jobs fund.
In March 2007, Lycera was granted a state tax credit worth $499,000 over five years for its plans to grow in Michigan. It also was awarded $150,000 worth of lab equipment through the Michigan Innovation Equipment Depot, established to funnel affordable equipment from Pfizer Inc. to Michigan startups.
