Washington Editor

Well-known German businessmen Andreas and Thomas Strüngmann, of Santo Holding, have made another substantial investment in the drug industry - this time in anti-infective firm AiCuris GmbH & Co. for €50 million (US$75 million).

The twin-brother investors - the former owners of Germany's largest generics company, Hexal, now part of Novartis AG - have had a "really good financial background" with AiCuris, which spun out of Bayer Healthcare in March 2006, said Holger Schmoll, head of finance and administration.

The new funds will help AiCuris advance its pipeline of anti-infective compounds to treat a variety of viruses, such as human cytomegalovirus (HCMV), HIV, herpes simplex and hepatitis B and C, in addition to multi-resistant bacteria, he told BioWorld Today.

The Wuppertal, Germany-based firm - a company whose name is derived from "anti-infective cures" - currently is in Phase IIb testing of its lead compound, AIC246, a non-nucleosidic HCMV inhibitor, in 132 bone marrow transplant recipients as a prophylactic treatment, Schmoll said.

HCMV, a beta herpes virus, has infected about 50 percent of the world's population, with the virus common in about 90 percent of residents in some nations, he said.

In most infected people, the virus is dormant, with no obvious symptoms, Schmoll explained. But for immunocompromised patients, such as patients with cancer or HIV, it can be life-threatening, he said.

The virus also can cause severe birth defects and can lead to life-long complications for infants who become infected with HCMV, such as hearing loss, vision impairment and mental abnormalities.

HCMV is the most common virus pathogen in solid organ transplant recipients, such as kidney, heart, liver, lung and pancreas, and also in patients who receive bone marrow transplants. In fact, it is the major cause of morbidity and death during the first six months after transplantation. The virus is characterized by fever, leucopenia and thrombocytopenia, with or without specific organ dysfunction.

To ensure transplant patients are protected from the virus, they are given prophylactic treatment with antiviral agents or preemptively treated when there is evidence of infection during a routine screening, Schmoll said. The "gold standard" treatment for HCMV is Roche AG's Valcyte (valganciclovir), he said. Roche's Cytovene (ganciclovir), Gilead Sciences Inc.'s Vistide (cidofovir) and AstraZeneca plc's Foscavir (foscarnet) also are indicated for HCMV, but those drugs have shown resistance.

The currently marketed HCMV treatments also come with severe adverse effects, Schmoll said. "For that reason, markets may expand significantly if you had a drug without side effects, because then you could use it in prophylactic use in the high-risk groups, like transplantation," he said.

Results reported last September at the Interscience Conference on Antimicrobial Agents and Chemotherapy meeting of AiCuris' Phase IIa study of AIC246 in 26 kidney transplant patients and one bone marrow transplant recipient showed that the drug's efficacy was comparable to Valcyte, Schmoll noted. AIC246 was generally very well tolerated, with no serious adverse events reported, he added.

AIC246 also has shown efficacy in treating one patient who had developed viremia due to resistance to ganciclovir, foscarnet and cidofovir.

The current Phase IIb study in the prophylactic setting is important because "prophylaxis is the preferred option of the medical community," Schmoll said. But, he added, "due to the severe side effects of the marketed drugs, it is not the main strategy at the moment." On the other hand, AIC246's current safety data of 240 patients have shown no severe adverse effects, Schmoll said. AiCuris expects to have data from the Phase IIb study by spring 2011, he noted.

The company, which has 10 development candidates, also is in Phase II testing of its herpes simplex compound AIC316, with results from that study anticipated by early next year, Schmoll said.

While much of the $75 million raised in the recent financing will be used for clinical trials, the funds also will go toward research activities, he said.

Schmoll noted that AiCuris currently is in discussions with several potential collaborators for AIC246. "We are looking for a strategic partner for Phase III and also for the marketing of this drug," he said. The additional $75 million investment, Schmoll said, has created the "possibility to look for this partner without any pressure."

In other financings news:

• Exact Sciences Corp., of Madison, Wis., said it priced an underwritten public offering of 4.2 million shares of common stock at $4.50 per share to the public. The company has granted the underwriter in the offering an option to purchase up to 630,000 additional shares of common stock at the same price per share to cover any overallotments. The number of shares in the offering represents an increase of 20 percent, or an additional 700,000 shares, from the previously announced offering size of 3.5 million shares of common stock. The offering is expected to close April 19.

• Manhattan Pharmaceuticals Inc., of New York, said it has closed its private placement selling 121 units, including the conversion of about $400,000 of existing debt into 17 units, for an aggregate of $3 million of its common stock and warrants to accredited investors. Each unit consisted of 357,143 shares of common stock and 535,714 warrants to purchase additional shares of common stock at an exercise price of 8 cents per share. The net proceeds from the financing will be used to advance the company's products including AST-726, a nasally delivered treatment for vitamin B12 deficiency, and Hedrin, a nonpesticide treatment for head lice, and also for general corporate purposes.

• Radient Pharmaceuticals Corp., of Tustin, Calif., said it closed the second of a 12 percent convertible promissory note and warrant financing for the sale of additional notes in the aggregate principal amount of $5.5 million. The second note financing was offered to 25 accredited investors with similar discount terms and lender fees to that of the first financing for net proceeds of $3.225 million with warrants to purchase 6.5 million shares of common stock.

• Tengion Inc., of East Norriton, Pa., completed an initial public offering of 6 million shares priced at $5 apiece for net proceeds of about $26 million. Underwriters Piper Jaffray and Leerink Swann have an option to purchase an additional 900,000 shares to cover overallotments. (See BioWorld Today, April 12, 2010.)