It was a big week for Art Pappas, managing partner of Pappas Ventures.
He accepted the 2017 Life Science Leadership Award at the CED’s Life Science Conference on Wednesday and CoLucid, a company his firm backed and he led as founding CEO closed its $960 million acquisition by Eli Lilly and Co. the same day.
“It set me back. I didn’t expect it, and it was humbling,” Pappas said iin an interview when asked about his reaction as the CED called him to tell him he had won its Life Science Leadership award. “It’s also been humbling to hear all the things people have come up to me and said here. It’s great recognition.”
Pappas, who serves on the board of directors of the North Carolina Biotechnology Center’s executive committee as its past chairman, has contributed some three decades to the growth of North Carolina’s global leadership in the life sciences. He’s also a director of the National Venture Capital Association.
He founded Pappas Capital in 1994, and over the past 20 years the firm has managed $450 million in capital and invested in more than 70 life science companies. It is now one of the largest life science investors in the Southeast.
Pappas said the number of companies forming and raising capital that presented at the CED event “Is special for our area.”
He said he tells people not to compare the Research Triangle and Southeast to Boston and California. “The gap is too huge. But in all the under-performing markets, the Southeast numbers are very important.”
If more biotech companies founded here stayed here, we would have an even larger hub, he noted.
The exits
The Colucid was the second major exit of a Pappas-backed firm in the last nine months. California-based Affferent sold to Merck in June in a $1.25 billion deal.
Pappas said CoLucid almost did not make it to the Phase III clinical trial stage with its migraine drug lasmiditan. “We had always planned to sell CoLucid to a large pharmaceutical company to take it into Phase III testing,” Pappas said.
At the time, a large Phase III trial that looked at four data point areas the FDA required would have been too expensive for a venture firm to afford. When no acquisition materialized, “We spent a fair amount of time with the FDA to find new end points,” Pappas said. The FDA liked the CoLucid drug because it worked by a different mechanism than others available and had a good safety profile.
“So they helped us design a new protocol for migraine trials. The drug had to show efficacy by providing two hours of pain relief and also relieve a major symptom each trial patient reported, such as nausea. “That cut the trial cost by half. It’s now the standard protocol for migraine trials, but we were the first.”
After raising more venture capital in a mezzanine round, the Massachusetts-based company launched a successful IPO and the eventual results of its Phase III trial “were so significant it got everyone’s attention,” said Pappas. He added that one of the more amazing things about the company, “Is that we only had six employees. It was very capital efficient.”
