Ceptyr, a biotech company in Bothell with roots in a Nobel Prize-winning laboratory at the University of Washington, has run low on cash and laid off about half of its staff. The company has cut...
Ceptyr, a biotech company in Bothell with roots in a Nobel Prize-winning laboratory at the University of Washington, has run low on cash and laid off about half of its staff.
The company has cut about 20 people, mostly biologists and chemists, leaving it with a staff of about 20. Ceptyr is narrowing its focus to a drug candidate against diabetes and obesity, said Robert Nelsen of Arch Venture Partners, one of the company’s largest financial backers. The company is also receiving an undisclosed “continuing investment” from insiders to keep the company going.
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“They’re right-sizing their operations to match their money in the bank,” Nelsen said. “The company is still in a state of forward progression.”
Ceptyr was founded in 1995 by the son of biotechnology legend George Rathmann and young scientists who gained experience in the labs of UW Nobel laureates Edmond Fischer and Edwin Krebs. It has raised about $40 million since its founding, including a $20 million round less than two years ago. The roster of investors includes Rathmann’s family venture fund, Falcon Technology Partners; Bill Gates’ Cascade Investment; and Arch Venture Partners.
The company’s chief executive, Paul Abrams, did not respond to a request for comment. Employees, who signed confidentiality agreements, were asked by management not to speak with the press about the layoff, according to a person familiar with the situation.
Nelsen said the company’s future is not in jeopardy — he said the current investors are committed to keeping it going, and the science has potential. The catch is that after nearly 10 years in business, Ceptyr has not yet advanced through animal testing to human clinical trials.
Ceptyr’s business is built on PTPs, a class of targets on cells that show potential in weight control but have been extremely difficult for pharmaceutical companies to hit with effective drugs. Ceptyr has stuck with it, partly encouraged by findings from one of its scientific advisers at Harvard Medical School.
The adviser, Benjamin Neel, showed that after he deleted the gene that produced one type of PTP in mice, the mice wouldn’t gain weight on a high-fat diet. The mice also had more glucose tolerance, which could make them less susceptible to diabetes.
The next task, which has proved extraordinarily difficult, is to design a chemical compound to hit and effectively bind with the PTP biological target in animals. The company would then have to spend years to demonstrate the compound’s safety, and prove it has the same weight-control effect in humans.
Nelsen said he’s still excited about Ceptyr’s potential because “they are the leading company in the world“ in PTPs and the markets for obesity and diabetes are large.
He said the cutbacks are something every startup goes through on the long path of drug development.
“This company has as much real upside as anybody if it can execute on its plan,” Nelsen said. “The hardest part is raising the right amount of money to be able to execute.”
Luke Timmerman: 206-515-5644 or firstname.lastname@example.org