By Mary Welch
Staff Writer
Phytera Inc. raised $9.1 million in a private placement to advance its integrated natural product-based discovery platform.
We were looking in the $8 million to $12 million range, said Malcolm Morville, Phyteras president and CEO. We had started late last fall, completed the meetings and set the price later last year before the biotechnology market became strong. We were looking when it was still a tough market. If we were doing it today, Im sure we would have found it easier. Timing is everything.
The equity financing involved both new and existing institutional investors in Europe, Asia and the U.S. Index Securities, of Geneva, Switzerland, and SG Cowen Securities Corp., of New York, acted as placement agents for the offering.
According to our current business plan, this capital will last until we become profitable, Morville said. One of the advantages of our discovery platform is that it can be used in a variety of industries. We have seven deals under our belt and expect to do four to five this year.
In fact, the private Worcester, Mass., company signed a deal earlier in the week with Unilever Research U.S., of Edgewater, N.J., to discover agents useful in certain types of personal care products. Phytera will provide Expand plant cell culture extracts and 5Marine marine microorganism extracts for screening in Unilevers proprietary assay systems. The companies will collaborate on the optimization of active extracts and develop products for personal care uses.
This is important for us, Morville said. Our first four or five years we focused our efforts in the pharmaceutical area but we always understood that our chemical and genetic libraries could be used in other areas. And now were branching out to other areas. I really dont know what personal care products Unilever has in mind.
Phytera, which has wholly owned subsidiaries in Sheffield, UK, and the Denmark cities of Copenhagen and Tastrup, is focused on applying novel and proprietary technology platforms to access the genetic and chemical diversity of plant cells and marine microbes in cell culture. Under Phyteras approach, only a single sample of each plant is required to establish a cell culture. Thus the company can maintain a renewable source of plant material without depending on a continuous supply of live plants.
The resultant chemical and genetic diversity libraries are being directed toward the identification of products within the pharmaceutical, cosmetic, agricultural, nutraceutical, industrial enzyme and other business segments.
In addition, Phytera is developing mutant strains of bacteria that have been genetically modified to delete multiple drug resistance (MDR) pumps. Such MDR pump knockouts have been shown to display increased sensitivity to a variety of antimicrobial agents. Phytera is using its MDR pump knockout technology in the antifungal area in its collaboration with Eli Lilly and Co., of Indianapolis.
Phytera scuttled an initial public offering last April when it tried to sell 2.5 million shares on the Copenhagen Stock Exchange and EASDAQ. In June, it raised $7.6 million in a private placement.