Trichotillomania is a neuropsychiatric disorder afflicting about 1 percent of the U.S. population. Those with the condition pull out their own hair, causing noticeable hair loss and significantly impacting self-esteem, health, employment and quality of life.
After a promising Phase 1 clinical trial, Milwaukee-based Promentis Pharmaceuticals Inc. in December entered Phase 2 of clinical trials for a drug to treat the condition, which is believed to be exacerbated by glutamatergic imbalance and oxidative stress – factors Promentis’ compound targets.
Klaus Veitinger, CEO of Promentis Pharmaceuticals.
And Promentis has raised most of a $26 million Series C round of investor funding to fuel its next stage of growth, with Brookfield-based Golden Angels Investors among the contributors, which also include OrbiMed, F-Prime Capital Partners, Aisling Capital, Black Pearl GmbH and individual investors.
Promentis’ lead compound, SXC-2023, has the potential to treat not just trichotillomania, but also a wide range of adult impulse control diseases, including obsessive compulsive disorder, and substance-related and addictive disorders, said Klaus Veitinger, chief executive officer.
“Right now, the goal is to show safety and efficacy for our mechanism of action,” Veitinger said. “…because once you are there, there are a lot of options because this mechanism’s applicable to a whole host of psych disorders and even some neurological disorders.”
Promentis was established in 2007 by Dr. David Baker, a Marquette University professor and associate chair of the Department of Biomedical Sciences, and John Mantsch, the chair of Marquette’s Department of Biomedical Sciences.
The company has previously raised a total of $5 million from investors. With its recent Series C raise, the company adjusted its leadership structure.
Veitinger, a venture partner with OrbiMed, was named chief executive officer and Daniel Lawton was named president in March 2017. They replaced Chad Beyer, who had served as president and CEO before this most recent investment.
Veitinger and Dr. Stephen Squinto also joined the Promentis board as OrbiMed representatives. Dr. Tom Beck, executive partner at F-Prime, was named chief medical officer of Promentis and was appointed to the board. And Stacey Seltzer joined the board as a representative of Aisling.
Promentis’ technology, which was in-licensed by Marquette University and the University of Wisconsin-Milwaukee, must go through one more phase of development before it can be brought to market, which Veitinger estimates will be around 2023.
“The one thing about our industry is it’s a little bit almost like building the next 747, so it’s…a big project, very complex, and you have to think it through from the beginning to the end,” Veitinger said.
Pharmaceuticals are notoriously difficult to develop, with an arduous and costly process of testing to gain FDA approval.
“This is not an uncommon pathway at all,” said Michael Harrison, Milwaukee business development manager at state industry organization BioForward Wisconsin. “It’s a very long road. Just getting initial funding, a lot of them are beholden to NIH grants to begin with. If they see a commercialization potential then they start with SBIR grants because it’s very hard to get funding.”
Promentis has targeted trichotillomania because there is nothing approved to treat it, and there is a clear medical need, Veitinger said.
“You can receive several benefits from the FDA for going after rare diseases, so that was probably part of their reasoning,” Harrison said. “That being said, there are a lot of underappreciated or under-recognized psychiatric disorders. It’s less rare than people thought it was initially.”
The company, which has most of its employees in Milwaukee and a couple in a Boston office, is also working to launch a parallel study on obsessive compulsive disorder, for which it would need additional funding, he said.
When Promentis was founded, there was a lot of investor interest in psych drugs, but it died down over the past few years, Veitinger said. Now, that interest is emerging again.
“Psych is always a tempting investment for investors because there’s a lot of unmet need,” Veitinger said. “But it’s also sometimes scary because a lot of things have to play out, so it’s seen as risky.”
Promentis is among a few Wisconsin companies focused on small-molecule drug development, of the 90 or so in the pharmaceutical sector, Harrison said. The company has been lucky to gain the funding to continue its testing to this phase.
“Because of the riskiness and the lack of funding for those types of startups, we don’t have a lot of them,” he said. “It’s somewhat uncommon for them to get this far as a private entity as they have.”
Long-term, Promentis is expected to either go public or have a merger event, Veitinger said.
That Promentis has advanced this far in its development without being acquired or selling its formula to a large pharmaceutical company is notable, Harrison said. It speaks to the strength of the company’s leadership that it was able to secure early-stage funding from Wisconsin investors.
“Promentis is a very successful and important part of that pharmaceutical ecosystem because it’s something that we don’t have a lot of,” he said. “It’s an excellent model for people to go after and see how they found success.”