As dozens of North Carolina technology startups endure a parched financing landscape, drug development firm Nobex is awash in a flood of money from a major partnership agreement and a pending venture capital deal.

Nobex, which is developing oral versions of protein-based drugs currently available only through injection, announced Wednesday a licensing deal with GlaxoSmithKline that will garner the company $283 million if the oral insulin it has developed can make it through the testing phase, win regulatory approval and make it to market.

The company also is finalizing a deal that will bring in another $22.5 million in venture cash on top of $12.5 million it raised last fall. Local Tech Wire reported recently that AEA Investors of New York has been lined up to lead the new funding round, committing $12 million to the deal, and that Sweden-based HealthCap also is expected to take part in the round.

The GSK licensing deal includes an unspecified amount of cash upfront and money tied to certain milestones in the oral insulin development, but Nobex Chief Executive Chris Price says that the company already has term sheets in place with venture capital firms and is proceeding with the deal.

“It’s not like we’re getting $100 million” immediately from GSK, he says. “We still need the (venture) money for our other programs and will continue with the transaction.”

When asked if he would like to renegotiate the terms of the venture deal with its investors based on Nobex’s new position, Price just laughs.

However, the company has been able to shave $5 million off the size of the venture round following the GSK deal, leaving officials with more equity as they position the company for a public stock offering next year.

Shifting to rest of pipeline

GSK will fund the remaining clinical trials the oral insulin needs for regulatory approval – the drug currently is in the late stages of Phase II trials – which allows Nobex to spend the venture money on its other development projects.

An oral calcitonin to treat osteoporosis, which is being developed with Irish drug maker Elan, is in Phase I trials, while Nobex expects to begin trials on an oral treatment for Crohn’s disease, an inflammatory bowel ailment, later this year and an oral human growth hormone sometime next year.

“Strategically, this (licensing deal) means that we can shift our resources to other internal programs and accelerate and broaden them,” Price says. “We also get to work with a great pharmaceutical partner on our lead product.”

GSK will assume the lead role in guiding oral insulin through the federal regulatory approval process and manufacturing and marketing the drug for mass consumption, but Price says Nobex will continue to “have a lot of influence” on the drug’s future by playing a major role on the development committees GSK will establish to follow the drug through the pipeline an onto the market.

Nobex had discussed a licensing deal with five top pharmaceutical companies over the past several months, and Price said the proximity of his company to GSK’s U.S. headquarters in Research Triangle Park played a role in choosing that company as a partner.

“Geography wasn’t Number 1 on our list when we were looking to do a deal, but it certainly ended up being a factor,” he says. “It makes a hell of a difference when you can sit down face-to-face almost daily rather than conduct business through phone calls or e-mails over the ocean.”

More research planned

GSK also provides Nobex with the global marketing and manufacturing capabilities it needs to promote oral insulin in the American, European and Asian markets and with a partner experienced in diabetes drugs. GSK’s Avandia medication for diabetes had worldwide sales of more than $1 billion last year.

That experience also could help Nobex develop new versions of oral insulin, according to Price. As part of the licensing deal, GSK agreed to collaborate on further research on oral insulin, such as developing a basal dose that helps people with juvenile-onset diabetes 24 hours a day. Nobex’s current product is a fast-acting dose that diabetics take at mealtime.

“We eventually need to get a longer-acting version, and the assistance of their scientists will help us reach that goal,” he says.

Nobex website: www.nobexcorp.com