Staff Writer

Working to finalize the protocol for a potentially pivotal trial of its anti-CD3 antibody for diabetes, MacroGenics Inc. raised $45 million in a Series C round.

"It's not the easiest market right now, and we wore out a lot of shoe leather," said Nelson Campbell, chief financial officer of Rockville, Md.-based MacroGenics, crediting the company's "strong investor base," as well as "our exciting CD3 molecule, which has been a good catalyst for us, as well."

The biggest chunk of the proceeds will go toward the anti-CD3 monoclonal antibody program, which is heading into a Phase II/III study in Type I diabetes expected to begin later this year. Details of the trial protocol still are in the works, but "it's our hope that the trial will be sufficient for a [biologics license application]," Campbell said.

MacroGenics' anti-CD3 antibody was developed with a modified Fc component and is designed to attack the progression of Type I diabetes by interfering with the autoimmune mechanism that leads to the destruction of beta islet cells in the pancreas responsible for producing insulin.

"We're actually depleting the variant immune system cells that are attacking the insulin-secreting cells," Campbell said, adding that an early clinical data showed that the molecule was capable of providing statistically significant protection against disease progression over a 24-month period.

MacroGenics' Phase II/III trial will involve newly diagnosed Type I diabetic patients to "see if we can preserve some pancreatic function," he told BioWorld Today.

According to the American Diabetes Association, about one in every 400 to 500 children and adolescents will develop Type I diabetes.

At this time, MacroGenics holds all rights to the anti-CD3 molecule, which it acquired last year from Chicago-based Tolerance Therapeutics Inc., though it might consider partnering the product.

Behind its anti-CD3 molecule, the company has several programs in its early stage pipeline based on its Fc engineering technology, including a Phase I molecule targeting CD16 for treating antibody-mediated autoimmune diseases such as rheumatoid arthritis, lupus and idiopathic thrombocytopenia purpura. That product emerged from a 2003 partnership with Cambridge, Mass.-based Genzyme Corp. Terms called for Genzyme to make a $5 million equity investment in MacroGenics. Genzyme has sole responsibility for manufacturing and commercializing any products that rise from the deal, with MacroGenics keeping certain co-promotion rights in the U.S.

An antibody targeting CD32 is in late preclinical development in cancer, and might also prove to be efficacious against autoimmune and inflammatory diseases. The company has other preclinical efforts aimed at infectious diseases.

To date, MacroGenics has raised a total of $106 million in venture financing. Campbell said that "it's difficult to say how long" the recent round will sustain the company's operations.

"It depends on a lot of things, including the size of the Phase II/III study and how our programs do, and also how our corporate partnerships go," he said.

Along with its Genzyme alliance, MacroGenics signed a research and licensing collaboration in April 2004 with Horsham, Pa.-based Neose Technologies Inc. In that deal, Neose agreed to apply its GlycoAdvance and GlycoPEGylation technologies to MacroGenics compounds, and MacroGenics has the right to take a limited number of remodeled compounds into development under an exclusive license from Neose. In exchange, MacroGenics would pay Neose option fees, milestones and royalties.

The financing, its largest to date, was led by Ventures West, of Vancouver, British Columbia, with participation from new investors Caisse de depot et placement du Quebec, of Montreal; RiverVest Venture Partners, of St. Louis; and San Diego-based Biogen Idec New Ventures. Existing investors included Menlo Park, Calif.-based Texas Pacific Group Ventures; San Francisco-based Alta Partners; Menlo Park, Calif.-based InterWest Partners; Boston-based MPM Capital; Boston-based Mithra Ventures; New York-based OrbiMed Advisors; and Baltimore-based Red Abbey Venture Partners.

Maha Katabi, vice president of Ventures West, joined MacroGenics' board.