Staff Writer

Alantos Pharmaceuticals Holdings Inc. is poised to move its lead compounds into clinical development for osteoarthritis and diabetes after raising $20 million in private financing.

The Series B round brings the total money raised by Alantos to about $47 million. The company completed a $27 million equity financing in July 2003, coinciding with the company's name change from Therascope AG.

"We're excited by the support our investors have shown," said Keith Dionne, president and CEO of Alantos, adding that it is because the company's lead programs can "ideally affect osteoarthritis and diabetes."

The financing was led by existing investors Oxford Bioscience Partners, of Boston; SV Life Sciences, of London; Earlybird Venture Capital, of Hamburg, Germany; ABN AMRO, of Amsterdam, the Netherlands; Heidelberg Innovation, of Heidelberg, Germany; and Ventech, of Paris.

Net proceeds will be used to advance the company's lead compounds in osteoarthritis and diabetes "into clinical trials and through proof-of-concept studies," Dionne said.

In osteoarthritis, Alantos is developing a disease-modifying compound to target the MMP-13 protease that contributes to the breakdown of the joints, both bone and cartilage. Unlike marketed products for osteoarthritis, which treat only the patient's pain, Alantos' compound is aimed at preventing the degradation of Type II collagen in joints by inhibiting the MMP-13 enzyme, Dionne told BioWorld Today.

"That will halt the progression of osteoarthritis, thereby preventing a lot of the long-term complications and steady progression of debilitation" that usually results in a joint transplant, he said.

Although Dionne conceded that previous attempts to inhibit MMP have failed to make it past the development stage, he said that was due, "in large part, to issues of non-selectivity," such as toxicity stemming from the broad range of inhibition. However, Alantos specifically is targeting the MMP-13 protease, identified by the company's medicinal chemistry platform.

"This is a very exciting program, both to us and to the inflammation and osteoarthritis community," Dionne said.

Alantos' research and development efforts have centered on its three chemistry platforms, including the TACE (Target Amplified drug Candidate Evolution) technology licensed from Madison, Wis.-based EraGen BioSciences Inc. The TACE system allows researchers to identify an inhibitor of an enzyme "by using the enzyme itself to guide the synthesis of the molecule," he said.

The LTD (Lead to Drug) platform allows Alantos to use its medicinal chemistry principles, along with known inhibitors of molecules, to triangulate and identify chemistry that shows interactions with the drug target. The third platform, High Speed Analoging, provides for the evaluation of large numbers of compounds aimed at a specific target.

In addition to its research in osteoarthritis, Alantos intends to move forward on a treatment for Type II diabetes, in preclinical studies targeting the inhibition of DPP IV (dipeptidyl peptidase).

"The DPP IV program has recently been validated by Novartis as a very important target in diabetes," Dionne said, adding that the inhibition of DPP IV "shows the ability to maintain long-term glucose control in Type II diabetes."

DDP IV degrades the glucagon-like peptide-1 that stimulates insulin production. DPP IV inhibition results in a higher secretion of insulin, leading to "much greater control of glucose in the bloodstream, which is the Holy Grail for diabetes," Dionne said.

Alantos has completed a portion of the animal studies for the DPP IV program and is close to selecting a development candidate, but the company is not alone in the field. San Diego-based Syrrx Inc. and Wilmington, N.C.-based PPD Inc. submitted an investigational new drug application for SYR619, a compound aimed at DPP IV, in December, and Point Therapeutics Inc., of Boston, introduced its preclinical compound, PT-630, last year.

Dionne estimates that Alantos' recent financing should carry the company into 2007 and provide funding to get through proof-of-concept studies for the lead compounds, though he said that estimate could be affected by the company's partnering strategy. Alantos expects to start seeking a partner for its diabetes program, and, though not looking to partner its osteoarthritis product right away, the company has been in contact with large pharmaceutical companies interested in collaborating, he said.

While its previous financing round accompanied a name change, the Series B round coincided with the relocation of Alantos' headquarters from Heidelberg, Germany, to Cambridge, Mass.

That decision was "based on the fact that Cambridge is becoming the center for both biotechnology and pharmaceutical" activity, Dionne said, adding that the company will maintain its facility in Heidelberg to focus on discovery and chemistry efforts.

"This gives us the best of both worlds," he said. "We have the strong technology in Germany and the strong management and exposure to potential partners in Cambridge."

Alantos also recently announced the appointment of Frank Douglas as chairman. Douglas, who previously served as executive vice president of Aventis Pharma AG, of Frankfurt, Germany, now works as an executive-in-residence at MIT Sloan School of Management where he is establishing a Center for Biomedical Innovation.