Austin biotech company Lung Therapeutics said Tuesday it has raised $14.3 million to help fuel its quest to develop drugs to treat fibrosis, lung injury and other diseases.
The lead investor in the funding round was Bios Partners.
Lung Therapeutics is currently engaged in clinical trial testing on its lead drug, which can be used to treat fluid build-up around lungs. This typically occurs with patients that have serious cases of pneumonia.
The money raised this week will allow the four-year-old biotech company to finish Phase 1 clinical trials of its lead drug and move a second drug into the clinical trial phase of drug development, said CEO Brian Windsor.
Lung Therapeutics has raised a total of $17 million since it was founded, in addition to $27 million in grant funds.
The company was founded by the University of Texas Health Science Center at Tyler and the UT Horizon Fund, which is a venture fund associated with the University of Texas System, Windsor said.
The drug was initially developed by Steven Idell, who is the chief scientific officer of the company and is the senior vice president of research at the health science center in Tyler.
Windsor, who has worked in the biotechnology industry for 18 years, joined the company as CEO in 2013. “I was really the only employee for the first couple of years,” he said, adding that Lung Therapeutics is still a fairly small operation with four full-time employees.
Lung Therapeutics’ lead drug, known as LTI-01, is currently undergoing Phase 1 clinical testing in Australia and New Zealand, Windsor said. This drug is designed to treat scar tissue and fluid build-up around lungs, which often occurs when someone has been hospitalized for pneumonia.
“It’s a really serious situation that can quickly lead to sepsis,” Windsor said. Sepsis is a widespread inflammation that can slow blood flow and damage your organs.
How this condition is currently treated is through surgery, he said, but Lung Therapeutics’ enzyme-based drug would allow someone to be treated just by having the drug injected near the scar tissue, Windsor said.
The company eventually plans to pursue drug approval in the United States. Windsor said it made sense to start the drug approval process in Australia and New Zealand in part due to tax incentives offered by those countries’ governments.
The company’s second drug, which is in the pre-clinical stage, is designed to treat fibrosis, which is the thickening and scarring of connective tissue.
A fairly typical trajectory for a biotechnology company is to raise money from outside investors, and then go public to raise additional funds to pay for the costly drug development process, which can take years.
Windsor said that he wants Lung Therapeutics to continue to grow and “get these drugs to market.” But he didn’t say whether Lung Therapeutics plans to pursue an initial public offering. He said the company’s leaders will spend the next 18 to 24 months considering their options.