Staff Writer

Noxxon Pharma AG has concluded a $2 million financing, as part of a $35 million Series D financing that will fund development of its three development programs to proof of concept.

The Berlin-based firm is developing Spiegelmers, which function like antibodies but are made of nucleic acid rather than protein.

Spiegelmers, oligonucleotides made from L-stereoisomer RNA, are RNA nucleotides much like aptamers. But they use a non-natural stereoisomer of DNA, so they are completely biostable and don't trigger immune responses, explained Aram Mangasarian, chief business officer at Noxxon.

One of the issues with nucleotides in the past has been the activation of an immune response, inflammation and other side effects, Mangasarian said. "We don't see that when we use the stereoisomers," he told BioWorld Today.

The German-sounding name of the molecule is partly derived from the German word for mirror, spiegel, as they are based on synthetic mirror-image oligonucleotides.

Of the three compounds in development, two have completed Phase I testing and the other is in the preclinical stage. The molecules are aimed at hematology (NOX-A12), anemia (NOX0H94) and complications of Type II diabetes, such as diabetic nephropathy (NOX-E36).

In animal models, NOX-E36 has shown beneficial effects in lupus nephritis and chronic obstructive pulmonary disease as well as diabetic nephropathy (kidney damage caused by diabetes).

Irving, Texas-based Reata Pharmaceuticals Inc. earlier this year reported favorable Phase II results in diabetics with chronic kidney disease. In two Phase II trials, Reata's antioxidant inflammation modulator, bardoxolone methyl, significantly improved kidney function in patients with advanced chronic kidney disease and Type II diabetes.

Bardoxolone methyl currently is being studied in a pivotal Phase IIb trial in the same patient population.

Pointing to the bardoxolone results, Mangasarian said, "We're hopeful we can do something similar."

Noxxon was granted clearance in July to begin a multiple ascending dose study of NOX-E36 in four study groups, the first in healthy volunteers and the rest in patients with Type II diabetes. Dosing of the first group began in August, to be followed by the diabetic group.

NOX-A12, aimed at autologous stem cell transplantation in hematological disorders, has been evaluated in models of stem cell mobilization, angiogenesis, inflammation and lung and kidney injury.

The first-in-human clinical trial for NOX-A12 was successfully completed in May in healthy individuals following intravenous administration of the drug candidate. A Phase I single dose study demonstrated that NOX-A12 was safe and well tolerated up to the highest tested dose (10.8 mg/kg). A multiple dose study of the NOX-A12 began last month.

Noxxon recently disclosed that hepcidin is the target for its preclinical stage candidate, NOX-H94, aimed at anemia of inflammation. The target, hepcidin, discovered by French researchers in 2001, is considered to be the key regulator of iron metabolism. Hepcidin, a liver-produced peptide hormone, triggers the "locking up" of iron inside cells.

H-94 is designed to open up the cell's iron stores by inhibiting hepcidin.

Cancer patients with chemotherapy-induced anemia (unusually low red blood cells) are often prescribed erythropoietin (Epo) to manage anemia. But Mangasarian noted that there is evidence suggesting that the use of Epo can stimulate cancer growth.

Although this is Noxxon's fourth financing, the company saw a rebirth in 2007 with its third round when the company closed a €37 million (US$51.5 million) Series C financing.

"In many ways, it was a fresh start," said Mangasarian. The third round, he said, brought in a number of new investors as well as new management.

Partnerships followed. In 2008, Noxxon and Eli Lilly and Co. entered a partnership to discover Spiegelmers for the treatment of migraine. Its 2007 collaboration with Roche AG centers on Speigelmers aimed at inflammatory diseases, the specific financial terms of which were not disclosed. Noxxon also is looking into partnering its two lead candidates.

Mangasarian is a former vice president of business development at Novexel, where he was part of a team that negotiated an acquisition by AstraZeneca plc in March for up to $505 million. As a vice president at ExonHit, he participated in fundraising activities and preparing that company for an initial public offering.

Noxxon's investors include NGN Capital, TVM Capital, Sofinnova Partners, Edmond de Rothschild Investment Partners, Deutsche Effecten- und Wechsel-Beteiligungsgesellschaft, Seventure Partners, Dow Chemical Co., Dieckell Group, Oppenheim Asset Management Services, IBG Risikokapitalfonds, VC Fonds Berlin and CD Ventures as well as others.

In other financing news:

• Pluristem Therapeutics Inc., of Haifa, Israel, entered into definitive agreements with selected institutional and private investors to sell restricted common stock and warrants for aggregate gross proceeds of about $5.25 million. The offering includes 4.375 million shares of common stock at a per share purchase price of $1.20 and four year warrants to purchase 2.625 million shares of common stock at an exercise price of $1.80 per share, exercisable six months following the issuance thereof. The closing is set for no later than Oct. 18. Leader Underwriters Ltd. acted as the Israeli placement agent for the transaction, and Rodman & Renshaw LLC acted as the U.S. placement agent.