BioWorld Today Correspondent

LONDON – GenKyoTex SA has raised CHF18 million (US$20.4 million) in a Series C round, enabling it to take the lead product to the point where it is ready to deliver clinical proof of concept for the company's NOX enzyme inhibition technology.

At the same time it was announced that Ursula Ney, former chief operating officer of the UK biotech firm Antisoma plc, has been installed as CEO of Geneva-based GenKyoTex. Her appointment was a condition of the new investors in the round, led by Edmond de Rothschild Partners and including Vesalius Biocapital Partners and MP Healthcare Venture Management.

The existing backers, the business incubator Eclosion, SEFTI SGAM, a specialist fund of the French bank Société Générale and Fondation d'Aide aux Entreprises, a public fund, have invested a total of CHF11.8 million since the formation of GenKyoTex in 2006, and they all followed on.

"This round is a big step up in terms of attracting large international VCs into the company, and is a reflection of the progress that has been made in identifying NOX inhibitors," Ney told BioWorld Today.

The name GenKyoTex has been assembled from Geneva, Kyoto and Texas to reflect the locations of the collaborating scientists from Switzerland, Japan and the U.S. who carried out the spade work in identifying and classifying the family of Nicotinamide adenine dinucleotide phosphate oxidases – more handily referred to as NOX enzymes. The enzymes are responsible for generating reactive oxygen species (ROS) that modify biological pathways and cause tissue damage that is important in metabolic, cardiovascular, pulmonary and neurological diseases.

The NOX enzyme family consists of five isoforms and two analogues. "This is the basic research underpinning the company. What we have in house is a unique screening platform where we can identify NOX enzymes and screen selectively for different inhibitors," Ney said.

The lead compound, GKT137831, an inhibitor of NOX 1 and NOX 4, will now go into clinical development in the treatment of diabetic nephropathy.

"We know ROS are produced in a number of situations where there is damage to cells, but until now no selective inhibitors of the NOX enzyme family have been defined," Ney noted.

Attempts have been made to use scavenger molecules to remove ROS after they are generated, but those have not been successful in a clinical sense. "We can stop production early on in the pathway. We are not talking about mopping up afterward. What we have are druggable, small-molecule inhibitors of specific members of the NOX family," Ney said.

The big push now will be to get GKT137831 to clinical proof of concept as the route to validating the platform as a whole.

Reflecting this move to the clinic, GenKyoTex announced the appointment of a chief medical officer Philippe Wiesel, who was formerly medical director at Serono in the U.S. and Switzerland.

GenKyoTex will be working on preclinical proof of principal in other diseases also. Ney said most of the research will be carried out by academic partners.

In addition to diabetic nephropathy, GKT137831 has good preclinical data showing an impact in idiopathic pulmonary fibrosis and has U.S. and EU orphan drug status in that indication. There is also preclinical backing for NOX inhibition as a treatment for atherosclerosis.

"There are many pathologies where ROS is implicated. What we are doing now is to focus down and demonstrate that inhibiting NOX has a therapeutic effect," Ney said. "I was attracted by the broad applicability of inhibiting NOX, and we also need to do work at a preclinical level to demonstrate this."

Gilles Nobécourt, partner at Edmond de Rothschild, said the decision to invest was partly based on the wide applicability of the pathway.

"The issue for this kind of pathway is that it crosses different therapeutic indications, so the difficulty is to find the right indication to start with." he told BioWorld Today.

However, Nobécourt noted, "The lead compound has been developed to excellent quality standards and is fully characterized. We have a network of pharma experts who all told us, if it was their compound it would be given the green light to go into clinical development." The Phase I will include the measurement of biomarkers that are intended to be indicative of a biological effect.

As yet there is no firm plan on how to commercialize the technology. "That's something I've come to the company to consider," Ney said. "I don't want to give away too much value too soon. We'll get clinical proof of concept and then think about it."

In other financing news:

• Tetralogic Pharmaceuticals Corp., of Malvern, Pa., closed a $6 million investment with new investor Nextech Invest Ltd., of Zurich, Switzerland, an oncology focused venture capital fund. Combined with the $37 million Series C closed in 2010, TetraLogic said it has raised $43 million in the past year. The company said it will use the funds to complete Phase IIa studies with lead Smac mimetic drug candidate, TL32711, in solid tumors and to initiate clinical studies in hematological cancers.