Pappas Capital Announces the Passing of…

Diabetes treatment developer Lumena Pharmaceuticals has secured the $2 million it needs to start clinical trials and a little bit extra for good measure.

The company’s first round of investment was oversubscribed, leading to a haul of $2.5 million, according to amended filings made with the Securities and Exchange Commission. Lumena’s investors are venture capital firms Pappas Ventures and  RiverVest Venture Partners. The new capital means the company can proceed to human tests for its novel type 2 diabetes treatment, which aims to develop a pill to help patients regulate their blood sugar.

Research Triangle Park, North Carolina-based Lumena was founded last year. The company is developing a new diabetes treatment based on the role bile acids play as signaling agents in the gastrointestinal tract. When Lumena launched its fundraising efforts last year, CEO Michael Grey explained that most gastric bypass surgery patients are type 2 diabetics. In 80 percent of those patients, blood glucose levels normalized within days — a change that’s not attributed to weight loss. What happened was that bile was diverted.

In normal gastrointestinal function, bile is recirculated. But gastric bypass surgery also bypasses that mechanism. The presence of bile in the GI tract triggers receptors that release Glucagon-like peptide 1, or GLP-1, a hormone that helps regulate blood sugar. Lumena’s treatment would work within the GI tract to stimulate the body’s production of GLP-1. Unlike other drugs that circulate through the bloodstream, the targeted action could offer fewer side and effects compared to other diabetes treatments.

Lumena’s technology comes from company co-founder Slava Gedulin, a former scientist at Amylin Pharmaceuticals (NASDAQ: AMLN), a San Diego, California biotechnology company that develops diabetes and obesity treatments. Gedulin’s discovery came after he left Amylin and the company has no claims on Lumena’s technology.