Indy founded drug firm lands nearly $23M .pdf
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Indy-founded drug firm lands nearly $23M to
fight rare disease
February 13, 2017
Two local men who have been working on a potential blockbuster treatment for a rare and debilitating disease
are hopeful that a $22.6 million injection of venture capital will provide the boost needed to move the drug to
market—even if it means sweeping changes for their company.
Steve Plump and Dr. Mark Payne cofounded Chondrial Therapeutics Inc. in 2013 to develop a drug for
Friedreich’s ataxia, a genetic condition that afflicts only 5,000 Americans and as many as 20,000 people
worldwide. There is no treatment for the degenerative neuromuscular disorder that cripples its victims, causes
diabetes and, ultimately, leads to fatal heart disease.
Payne began investigating a novel but promising two-prong approach to fighting the disease more than a
decade ago when he was a researcher at Wake Forest University. He and Plump, the former chief marketing
officer for Indianapolis-based Eli Lilly and Co., joined forces after Payne became a pediatric cardiologist at
Indiana University Health’s Riley Hospital for Children.
A successful treatment for Friedreich’s ataxia would have billion-dollar potential, but the approach developed
by Payne could be even more lucrative because it could be used to treat other mitochondrial diseases.
Over the past three years, Plump and Payne have made progress with their company, but they thought a big
step was needed to pick up the pace.
That came this month when New York-based health-care investment firm Deerfield Management Co.
announced it was investing nearly $23 million in the company in an effort to take it to the next level.
The venture capital means a significant transition for Chondrial, which moved its headquarters from
Indianapolis to the Philadelphia area and replaced Plump as CEO as part of the deal.
Payne will retain his position of chief scientific officer.
“Drug-development expertise was something we had to have, and that’s what we’re getting from Deerfield,”
said Plump, who is still working with the company in an executive advisory capacity. “This is a substantial
investment that will allow things to proceed much faster.”
Chondrial’s headquarters in Bala Cynwyd, Pennsylvania, are near a new company laboratory at the University
Science Center in Philadelphia and the Friedreich’s Ataxia Research Alliance, or FARA, in Downingtown,
Philadelphia also is home to the Children’s Hospital of Philadelphia’s Friedreich's Ataxia Program, which was
started in March 2014 by the hospital, FARA and Penn Medicine as a collaboration dedicated to promoting FA
research and clinical care.
Deerfield named Dr. Carole Ben-Maimon as new president and CEO of Chondrial. Ben-Maimon has more
than 25 years of experience in the pharmaceutical industry, with senior leadership positions in drug
development at Impax Laboratories Inc., Qualitest Pharmaceuticals Inc., Alita Pharmaceuticals Inc., Barr
Pharmaceuticals Inc. and Teva Pharmaceuticals USA.
Plump said she had “the perfect profile” to take the company to the next level.
Ben-Maimon had been serving as an advisor with Deerfield, assisting with the evaluation of business and drug
This "is a watershed moment for Chondrial,” Ben-Maimon said in a written statement. “I believe the company
is in prime position to advance a potentially groundbreaking therapeutic for patients with Friedreich’s Ataxia
and capitalize on a broader vision of targeting and treating rare, debilitating mitochondrial diseases.”
Chondrial has had some success in raising capital. It scored $1.1 million from New York angel investor Tom
Hamilton in 2014 and used that money to manufacture small quantities of the drug for animal tests.
Last year, the company was accepted into a program run by the National Institutes of Health in which the
NIH’s researchers conduct tests on Chondrial’s drug and pay for outside contractors as needed. That program,
which the company valued at $5 million or more, is ongoing.
Patients with Friedreich’s ataxia have cells that don’t produce enough of the protein frataxin, which is used by
each cell’s power plants—called mitochondria—to convert fat and sugar into energy.
The obvious thing to do is to give patients frataxin. The problem is that just injecting frataxin doesn’t help,
because the body breaks down the protein before it gets inside the cells to the mitochondria.
Payne’s insight was to join frataxin to another protein, called TAT, which can successfully carry proteins into
the body’s cells and get them inside the mitochondria.
Plump said Deerfield’s involvement will ensure the company has enough capital to work toward its goals of
getting a treatment for Friedreich’s ataxia to market and using Payne’s approach to develop other drugs. He
said the the treatment, known as CTI-1601, could reach trials in a year or so with the additional help, but
cautioned it could still take longer.
“We were looking for a partner who could commit long-term to the compound, so we weren’t constantly trying
to raise money,” he said. “The goal is to get it into Phase One clinical trials as soon as possible, and this will
speed up the process.”