A $50,000 startup loan from the North Carolina Biotechnology Center has helped a young Chapel Hill pharmaceutical developer, Spyryx Biosciences, secure an $18 million Series A investment from a venture capital syndicate.

Spyryx was founded in 2013 to commercialize a unique approach for treating devastating lung diseases that was invented by specialists at the University of North Carolina at Chapel Hill. NCBiotech awarded the firm a Company Inception Loan in late 2014 to help it prepare for outside investment such as the venture funding announced today.

The Series A venture capital financing was from Durham’s Hatteras Venture Partners, Connecticut-based Canaan Partners, and 5AM Ventures of Menlo Park, California. As part of the transaction, Tim Shannon, M.D., general partner of Canaan, has joined the Spyryx board as chairman, and Christy Shaffer, Ph.D., managing director of Hatteras Discovery at Hatteras, and Brian Daniels, M.D., venture partner of 5AM, have also taken board seats.

UNC discovery targets new way to regulate lung fluid

Spyryx was formed to commercialize a discovery by UNC’s Robert Tarran, Ph.D., associate professor of cell biology and physiology. Tarran’s discovery is a biopharmaceutical twist on a previously unknown mechanism used by the lung to regulate fluid in the airways. The mechanism is dysfunctional in the lungs of cystic fibrosis patients and is thought to be an underlying cause of the progressive dehydration of the airway surface liquid. It’s a cascade that leads to such CF symptoms as mucus accumulation, chronic bacterial colonization, immune response and tissue scarring, loss of lung function, and often early death.

Tarran’s data suggest that his therapeutic approach may also be useful in treating chronic obstructive pulmonary disease and other obstructive lung diseases.

“Currently, there is no cure for CF or COPD,” said Spyryx founder Tarran. “We hope that we can use this funding to translate our laboratory findings into treatments for both of these diseases. We gratefully acknowledge key funding from the NIH and the North Carolina Biotechnology Center, which has enabled us to get to this point.”

Shannon added, “Significant recent progress has been made in developing treatments for cystic fibrosis, but there is still a lot of unmet need in this disease. Dr. Tarran and the team at Spyryx have developed strong data supporting their novel approach for restoring a normal mechanism for fluid regulation, and because it has the potential to treat all CF patients, it was a very compelling investment opportunity. We believe the company has a strong future ahead as it moves toward clinical validation of this therapeutic approach in a truly devastating genetic disease like CF, and perhaps beyond.”

Investment combines money, expertise

John Taylor, president and CEO of Spyryx, added, “We are excited to have raised this robust Series A funding and to have gained the support of world-class investment funds such as Canaan, Hatteras and 5AM.

“The financial strength this money brings to the company, and the significant expertise each of these funds has in pulmonary drug development, ideally positions Spyryx to rapidly advance our CF therapeutic into clinical development and to explore the potential for treating COPD.”

In a statement announcing the new financing, Taylor thanked departing board member Donald Rose, Ph.D., director of UNC’s Carolina KickStartprogram, and Rose’s KickStart team for their help in founding and nurturing Spyryx to this point.

Note: Veteran journalist Jim Shamp is director of public relations for the North Carolina Biotechnology Center.

(C) N.C. Biotech Center