RARE Daily

Stealth Receives Financing to Advance Mitochondrial Dysfunction Therapies

November 5, 2020

Rare Daily Staff

Stealth BioTherapeutics said it entered into a $35 million development funding agreement with Morningside Ventures to support the clinical development of elamipretide for the treatment of mitochondrial dysfunction disorders.

Dysfunctional mitochondria characterize a number of rare genetic diseases and are involved in many common age-related diseases, typically involving organ systems with high energy demands such as the heart, the eye, and the brain.

Stealth’s lead candidate, elamipretide, targets the inner mitochondrial membrane where it associates with cardiolipin—the signature phospholipid of the inner mitochondrial membrane that plays a role in many mitochondrial processes, including respiration and energy conversion.

Stealth believes elamipretide has the potential to treat both rare metabolic cardiomyopathies, such as Barth, Duchenne muscular dystrophy and Friedreich’s ataxia, and rare mitochondrial diseases entailing nuclear DNA mutations, such as POLG-related disorders, as well as ophthalmic diseases entailing mitochondrial dysfunction, such as dry age-related macular degeneration and Leber’s hereditary optic neuropathy.

Stealth received $20 million and is expected to receive up to an additional $15 million from Morningside Ventures contingent on near-term clinical milestones associated with Stealth’s geographic atrophy and Barth syndrome development programs. Additional investors may participate in subsequent closings of up to an additional $35 million of near-term funding commitments. In addition, the agreement contemplates that Stealth may receive up to an additional $35 million upon meeting certain pre-defined future milestones and subject to the agreement of the parties. Funds are intended to support the continued clinical development of elamipretide.

Under the terms of the agreement, Stealth will pay participating investors regulatory approval milestone payments in annual increments on a pre-determined payment schedule over seven years, with the majority of payments due in years five to seven years following regulatory approval. No approval payments are owed should regulatory approval not be achieved for elamipretide in the indications currently under or planned for near-term development. Stealth has an option to buy out all future, unpaid milestone payments at any time following certain regulatory approvals at a discounted rate. Stealth will retain exclusive worldwide commercial rights to elamipretide in all indications.

“This provides Stealth with critical funding to develop elamipretide in diseases of mitochondrial dysfunction with serious unmet need,” said Reenie McCarthy, CEO of Stealth.

The company is completing enrollment in a phase 2b study in geographic atrophy, preparing to file an NDA for elamipretide for the treatment of Barth syndrome, and expanding its development efforts to other rare cardiomyopathies and mitochondrial diseases. 

“The terms of the agreement maximize our financial flexibility ahead of anticipated near-term regulatory, clinical, and, potentially, commercial milestones,” said McCarthy.

Photo: Reenie McCarthy, CEO of Stealth

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