Assistant Managing Editor

Just two months out of the gate, oncology start-up Tesaro Inc. already has managed to secure an impressive amount of funding.

The Boston-based firm closed a $20 million Series A round led by venture firm New Enterprise Associates and company management, and there's another $40 million from NEA in reserve for future investment rounds. Not bad for a firm that doesn't even have a single product in its pipeline yet.

In this case, NEA is banking on the new firm's management team. Tesaro was founded by three former execs from MGI Pharma Inc., the Minneapolis-based firm that marketed several cancer drugs, including Dacogen (decitabine) for myelodysplastic syndromes, and was bought out by Eisai Co. Ltd. for $3.9 billion in 2008. (See BioWorld Today, Dec. 11, 2007.)

Tesaro CEO Lonnie Moulder, formerly the president and CEO at MGI, along with co-founders Mary Lynne Hedley and Rick Rodgers, are hoping to duplicate MGI's success with Tesaro, whose name is derived from the Spanish word "tesoro," meaning "treasure."

"We really see ourselves as treasure seekers," Moulder told BioWorld Today. "We have the opportunity to take the capital we've been entrusted with and find products in various stages of development and advance them to commercialization."

That's the same way Moulder, Hedley and Rodgers helped build the pipeline at MGI. That firm added Dacogen to its pipeline through a licensing deal with Dublin, Calif.-based SuperGen Inc. and picked up rights to cancer drug Gliadel (polifeprosan/carmustine) and sedative Aquavan (fospropofol disodium) in a 2005 buyout of Guilford Pharmaceuticals Inc., of Baltimore. Before its acquisition by Eisai, MGI had just added rights to thrombocytopenia candidate AKR-501 from AkaRx Inc., and Eisai exercised the option to purchase AkaRx in full last year. (See BioWorld Today, Sept. 2, 2004, July 22, 2005, and Dec. 21, 2009.)

But despite the advances made in oncology over the years, it remains a significant unmet need, Moulder said.

Tesaro, which already has started due diligence on a few programs, certainly has plenty of places to look for promising candidates, especially given the economic crunch that has forced many firms to shelve development programs or even look for distress-sale buyers. And other programs simply have been de-prioritized at pharma firms even though they might have huge potential.

"We're rather open-minded" when it comes to looking at different drugs aimed at cancer and supportive cancer care, Moulder said. "We're casting a large net.

"The ultimate customer is the patient," he added, so Tesaro likely will be seeking targeted agents and biomarker-based programs, following the science to determine which drugs "will benefit the patient the most."

For now, the firm's employees are limited to its three founders. But once the first program is acquired or in-licensed, Tesaro will be adding additional staff, Moulder said.

The company also is supported by its board, which includes Moulder and Hedley, as well as David Mott and Paul Walker, both of NEA.

In other financings news:

• Alvine Pharmaceuticals Inc., of San Carlos, Calif., said Abbott Biotech Ventures Inc. joined Alvine's current investors - InterWest Partners, Panorama Capital, Prospect Venture Partners, Sofinnova Ventures, Black River Asset Management and Flagship Ventures in a Series A extension round. Terms of the investment were not disclosed. Alvine previously brought in about $21.5 million in September. The firm is developing ALV003, an oral mixture of a glutamine-specific cysteine protease and a proline-specific prolyl endopeptidase, in celiac disease. (See BioWorld Today, Sept. 16, 2009.)

• Anadys Pharmaceuticals Inc., of San Diego, entered definitive agreements to raise about $12.5 million in a registered direct offering. The company agreed to sell about 5.8 million shares priced at $2.15 apiece. Net proceeds are expected to total about $11.3 million and will be used for general corporate purposes. Separately, the firm engaged Lazard Freres & Co. LLC as a strategic advisor to help pursue value from its non-nucleoside polymerase inhibitor, ANA598, which recently reported positive safety and antiviral data after 12 weeks of dosing in combination with pegylated interferon and ribavirin in an ongoing Phase II study in hepatitis C virus. Shares of Anadys (NASDAQ:ANDS) gained 15 cents to close Wednesday at $2.38.

• Funxional Therapeutics Ltd., of Cambridge, UK, completed a Series B financing round, raising €10 million (US12.2 million) from new investor Ventech and existing investors Index Ventures and Novo A/S. Funding will help the firm progress the development of anti-inflammatory therapies called broad-spectrum chemokine inhibitors, including lead candidate FX125L, an oral, small molecule slated for Phase II studies, plus preclinical backup compounds.