Portfolio News
Trius closes Series B
TheDeal.com
Paul Bonanos
25 March 2008
Blue-chip venture firm Kleiner Perkins Caufield & Byers has led a new $30 million second round of funding for antibacterial pharmaceutical developer Trius Therapeutics Inc., providing ample capital for continued clinical trials on the startup's primary drug candidate.
Menlo Park, Calif.-based Kleiner Perkins and Japanese investment bank FinTech Global Capital were the round's first-time investors. Returning backers included Sofinnova Ventures of San Francisco; Versant Ventures and InterWest Partners, both of Menlo Park; and Prism VentureWorks of Needham, Mass.
Sofinnova led Trius' $20 million first round of investment, formalized in February 2007, after the company licensed its first drug candidate from South Korean drug developer Dong-A Pharmaceuticals Co. Ltd. Trius chief executive Jeff Stein is also a Sofinnova venture partner. Dong-A will retain the rights to commercialize the drug in South Korea, although Stein said the company had done little to develop it.
Stein described the new round as "pre-emptive fundraising," since much of the Series A money remains on Trius' balance sheet. He said the company had enough capital to survive until early 2009 and had planned to raise a Series B in the second half of 2008. Instead, however, Trius aroused interest from a handful of venture firms after appearing at a healthcare industry conference in January. The startup received favorable term sheets from at least two contenders, ultimately choosing to work with Kleiner Perkins. Stein confirmed that Trius' valuation has risen since its first round, but he would not provide further details. Kleiner Perkins' move to finance the investment out of its $200 million Pandemic Preparedness and BioDefense Fund is significant because Trius is pursuing $100 million in government contracts to combat anthrax and other diseases.
Trius' lead product is an oxazolidinone antibiotic, which treats so-called Gram-positive bacterial infections, including methicillin-resistant staphylococcus and similar skin and soft-tissue infections. Although those are most often associated with hospital-based infections, Stein said they have recently begun to spread to the community at large, and have mutated into hyper-virulent strains.
The drug can be administered orally or intravenously. Initial Phase 1 testing has been performed on an oral version, but Trius will also pursue trials on the intravenous version.
Bigger drug companies have acquired several other antibacterial drug companies in recent years. The Ortho-McNeil Pharmaceutical Inc. subsidiary of Johnson & Johnson of New Brunswick, N.J., for example, bought out venture-backed Peninsula Pharmaceuticals Inc. for $245 million in 2005. That deal did not include a Peninsula drug property around which a new company, Cerexa Inc., was launched. Forest Laboratories Inc. of New York bought Cerexa in 2006 for $480 million.
Stein said Trius could be in position to be acquired "by this time next year," although it could see to raise additional private capital. The company plans to start second-phase clinical trials in October.
Attorneys in the San Diego office of Cooley Godward Kronish LLP, including M. Wainwright Fishburn, Charles Bair and Michael Penley, advised Trius on the deal. The startup did not hire a financial adviser.
