Washington Editor

The company, of Watertown, Mass., has been built on patents licensed from Harvard University through its Office of Technology Development for antibiotics against drug-resistant infections. Already, the totally synthetic technology has led to new tetracyclines created from benzoic acid as the starting material, overcoming a key barrier to developing new drugs from that class. Previous limitations on the bacterial synthesis of tetracyclines have led to the approval of just one new version in the past 30 years.

Excitement around the company's future market opportunities drove the financing, which is expected to last for four to five years. That's because drug-resistance research represents an area of "growing interest and intensity," said David Lubner, TetraPhase's senior vice president and chief operating officer.

There are several explanations for that, including overprescribing. Extensive antibiotic use has led to resistance "across a broad range of bacteria," he told BioWorld Today, pointing to methicillin-resistant Staphylococcus aureus' drift from hospitals into community settings as an example, and now commonly used antibiotics have "a limited effectiveness." In addition, there is a relative lack of attention or focus on antibiotics from big pharmaceutical firms, creating further opportunities for start-ups to enter the space.

"Docs need something more potent in their armamentarium," Lubner said.

Tetracyclines have been used for more than 50 years, and already TetraPhase's initial drug discovery and development efforts have yielded new tetracycline leads with activity against a range of bacterial strains, including many resistant to traditional tetracycline antibiotics. But importantly for TetraPhase, new tetracyclines are just the beginning.

The class represents a "starting point" for the company to launch into other antibiotic classes aimed at drug resistance, Lubner said, noting that the fundamental underlying technology is "fairly broad." Though he declined to provide specifics, he said TetraPhase also already has identified compounds from other antibiotic classes.

Developed by Andrew Myers and colleagues at Harvard, the core synthesis technology was published in Science in April 2005. It allows for modifications of all positions on a scaffold, which Lubner called a challenge for identifying new drugs in an existing class. "Using this total synthesis for the production of a whole bunch of analogues that heretofore would not have been seen by these bugs really opens up a lot of opportunity for some efficient drug development," he added.

In addition to MRSA, the company expects to target other kinds of soft tissue and skin infections, community- and hospital-acquired pneumonia, intra-abdominal indications and urinary tract infections. TetraPhase, which will pursue intravenous and oral antibiotics, will use its initial funds for internal medicinal and process chemistry, microbiology, preclinical toxicology and scale-up work to prepare for investigational new drug applications, as well as for initial Phase I studies.

The Series A round included Mediphase Venture Partners, of Newton, Mass.; Fidelity Biosciences, of Boston; Skyline Ventures, of Palo Alto, Calif.; Flagship Ventures, of Cambridge, Mass.; and CMEA Ventures, of San Francisco. With their investments, each firm received a seat on TetraPhase's board: Mediphase's Lawrence Miller is chairman, with Fidelity's Jason Rhodes, Skyline's Eric Gordon, Flagship's Doug Cole and CMEA's Karl Handelsman as directors. Its senior management also includes Louis Plamondon as senior vice president and chief scientific officer, and Xiao-Yi Xiao as vice president of medicinal chemistry.

The five-person company is expected to grow to a headcount of about 15, Lubner said. In the more distant future, partnerships "are on the table" for consideration to advance TetraPhase's antibiotics in the U.S. and abroad, he added. "But we want to build some value here first. There's a lot of opportunity here, and we think we have a differentiator in our approach."

In other financing news:

• Akesis Pharmaceuticals Inc., of San Diego, raised about $3.5 million through a stock and warrant sale that included about 5.9 million common shares at 60 cents apiece and warrants to purchase another 877,500 shares at the same price. The company plans to use proceeds in part to initiate clinical development of AKP-101, a product designed to lower and control blood glucose levels when used in combination with metformin in Type II diabetics. Avalon Ventures VII LP led the financing.

• Alba Therapeutics Corp., of Baltimore, secured a $10 million venture debt commitment from a syndicate consisting of Atel Ventures Inc., Oxford Finance Corp. and SVB Silicon Valley Bank. The capital will enable the company to accelerate the clinical development of AT-1001 in celiac disease and other autoimmune indications next year. The product, an orally administered zonulin receptor antagonist, is in a double-blind, placebo-controlled Phase II study to evaluate its safety, tolerability and efficacy in 79 celiac disease patients during gluten challenge.

• Alimera Sciences Inc., of Atlanta, received $15.9 million in the second tranche of its Series B financing, increasing the total amount raised to $31.8 million after an initial $15.9 million a year ago. The resources will be used to develop Medidur, Alimera's Phase III treatment for diabetic macular edema, and to expand its pipeline that includes additional drug delivery technologies. All the investors that committed to the initial tranche participated in the second, including BA Venture Partners, Domain Associates, Intersouth Partners, Polaris Venture Partners and Venrock Associates, as well as several individual investors.

• BioMS Medical Corp., of Edmonton, Alberta, raised C$20.9 million (US$18.5 million) in gross proceeds through a private placement of about 6.1 million units at C$3.41 apiece. Each unit consists of one Class A common share and one-half of one Class A common share purchase warrant, with each whole warrant entitling the holder to purchase one Class A common share at an exercise price of C$4 on or before Nov. 23, 2010. The multiple sclerosis company, which plans to use its proceeds to fund ongoing research and clinical development efforts and for general corporate purposes, expects to raise another C$3 million through a further closing of about 880,000 more units within the next two weeks. Versant Partners Inc. and Rodman & Renshaw acted as co-lead placement agents, with Fondsfinans ASA a co-placement agent.

• Discovery Laboratories Inc., of Warrington, Pa., raised $10 million in gross proceeds after completing a stock and warrant sale of about 4.6 million common shares at $2.16 apiece and five-year warrants for another 2.3 million shares at $3.18 each. The private placement was made with one selected institutional investor.

• Transgene SA, of Strasbourg, France, received a €25 million (US$32.8 million) award from the French Agency for Industrial Innovation to fund its participation in the Advanced Diagnostics and New Therapeutic Approaches project to meet personalized medicine challenges in cancer, infectious diseases and rare genetic diseases through the development of new diagnostic and therapeutic approaches. The funding, which is subject to European Commission approval, is to be paid over the life of the project and will consist of grants totaling €17.8 million and loans of €7.2 million, refundable only in case of success.

• WEX Pharmaceuticals Inc., of Vancouver, British Columbia, agreed to a C$1.6 million (US$1.4 million) private placement of 8.75 million common shares at C18 cents apiece to purchasers in China. Closing is expected on or about Dec. 8, the pain drug company said. The deal remains subject to certain conditions, including necessary regulatory and stock exchange approvals.