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Minnesota diabetes startup Exsulin seeks $25 million

Minnesota diabetes startup Exsulin, which is developing a drug to treat Type I diabetes, is trying to raise $25 million to help fund a large clinical trial next year.

CEO and co-founder Lisa Jansa, who has been slowly building the Burnsville company, said that Exsulin is looking to raise money from research universities that may be interested in licensing the technology as well as from areas of the world interested in tackling the growing problem of diabetes. Jansa traveled to Saudi Arabia earlier this year to see if she could land such deals. Saudi Arabia is suffering from a diabetes epidemic, Jansa said, noting that the Kingdom has the highest prevalence of diabetes-related amputations in the world.

But what about traditional financiers like venture capitalists and strategic investors — other pharmaceutical companies?

Jansa said the company hasn’t actively pursued VCs while strategic investors are waiting to see results of both current fundraising efforts as well as clinical efficacy before they commit any money. Exsulin has raised some angel investment in the past. Jansa won’t say how much but did reveal that this year would be the last time it would be able to participate in Minnesota’s angel investment tax credit program. That program disqualifies a startup if it has already raised $4 million.

Exsulin is a peptide-based drug in Phase II clinical trials that aims to regenerate insulin-producing islets in patients with TypeI diabetes. The first clinical study of the drug was done at the Mayo Clinic and at Canada’s McGill University. Another Phase II 12-week clinical trial will begin in September and that will take place only in Canada. Unlike the earlier trial, this will test how Exsulin is able to regenerate insulin-producing islets in combination with immune modulation therapy in people with TypeI diabetes.

Jansa said that current clinical trials of drugs trying to treat TypeI diabetes are limited because they only allow people who have had the disease for less than six months. The September Phase II clinical trial, on the contrary, is not exclusively for people who have had a new onset of the condition, but includes those who have had it for two years.

Exsulin is delivered through a sub-cutaneous injection.

The technology was licensed from Procter & Gamble, Jansa said, and the company had to get over some initial skepticism when P&G decided to end the program. But funds from Jansa’s other business — Kinexum, a strategic consulting company focused on cardiometabolism — have helped Exsulin stay afloat. Jansa and others who work at Kinexum, including Exsulin co-founder, chairman and chief medical officer Alexander Fleming, have not drawn separate salaries for their work on Exsulin.

“We believe in Exsulin’s ability to restore the body’s natural ability to produce insulin,” Jansa said.

TypeI diabetes affects one in 400 children and adolescents under 20 years of age, according to the American Diabetes Association. The group estimates that the total cost of diagnosed diabetes in the United States in 2007 was $174 billion.

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