Staff Writer

Serentis, a privately owned biopharmaceutical firm focused on treatments for skin conditions, has completed a £10 million (US$20 million) financing, expanding its total Series A financing to £15.3 million.

The funding will be used to advance and expand Serentis' dermatology pipeline, with the bulk of that money going toward clinical trials of its topical protease inhibitor for atopic dermatitis, commonly known as eczema.

Cambridge, UK-based Serentis plans to allocate the majority of its Series A funds to its two lead products for atopic dermatitis, both of which are expected to enter Phase II testing early next year, CEO Tim Sharpington said.

SRD441 is aimed at treating and preventing the flare-ups associated with atopic dermatitis, and is expected to enter Phase I in the next month or so and move into Phase II early next year, Sharpington said. Serentis' other lead program, SRD174, is intended for pruritus (itch), a distressing symptom of AD, and also is expected to move into Phase II early next year.

Both of the Serentis product candidates are nonsteroid treatments. Currently, the market for atopic dermatitis is $3 billion and is dominated by steroids, Sharpington said.

Effective nonsteroid medications for eczema "would be great," said Joanne Langeraar, administrative director at the National Eczema Association in San Rafael, Calif. She noted that over time many eczema patients eventually become resistant to steroids or may be at risk of developing side effects such as thinning of the skin or skin discoloration, seen in patients with darker skin.

The FDA has approved two nonsteroid treatments for eczema: Elidel cream (pimecrolimus, Novartis AG) and Protopic ointment (tacrolimus, Astellas Pharma US Inc.). But due to agency concerns about a potential risk of cancer with long-term use, those products later were labeled with a "black-box" warning.

The warning has caused many physicians to shy away from prescribing these nonsteroid drugs for eczema, Langeraar said.

Eczema affects about 17 percent of the U.S. population, often occurring in infants and children, according to the NEA.

About 2 percent of that population becomes resistant to steroid use, Langeraar said, and stronger steroids, such as oral and injectable products, often are used for that group. Natural, or homeopathic products, also are being tried, such as probiotics found in yogurt cultures or in pill form to decrease the chances of eczema in infants of pregnant women. In addition, she said fish oils have been recommended to ease flare-ups.

Founded in 2006, Serentis currently is in "pipeline building mode," Sharpington said, and is in discussions to acquire additional products. At least one of those deals that still are under negotiation could conclude early this year, he said.

In addition, he said, Serentis is awaiting key data from a research program, and hopes to take one of the programs into development in the near future.

In July 2007, Serentis announced a £10.3 million Series A financing co-led by founding investors MVM Life Science Partners LLP, Apposite Capital LLP and Novo A/S. The planned second tranche of £5 million has been expanded to £10 million supported by the same co-lead investors and new investor Healthcare Private Equity, the Scottish Widows healthcare venture fund. Bill Blair, CEO of Adamant Ventures, who manages the Healthcare Private Equity fund, joins the board of Serentis.

East Hill, the Boston-based venture capital firm which became a shareholder in Serentis following the acquisition of Surface Therapeutics in September 2007, also participated in the round.

In other financing news,

• Follica Inc., of Boston, said it raised $11 million in a Series B financing round, as it expands its team of experts in the area of hair loss. The company is developing technology that may have the potential to stimulate entirely new hair follicles. Polaris Venture Partners led the financing and existing investors InterWest Partners and PureTech Ventures participated.

• EpiCept Corp., of Tarrytown, N.Y., raised $4.9 million in net proceeds from a public stock offering and a simultaneous warrant exercise. The company is offering about 5.2 million shares of its common stock at about 76 cents per share and five-year warrants to purchase up to about 2.6 million shares of common stock at an exercise price of 63 cents per share. In addition, in consideration of receipt of $1.3 million for the exercise of all of the warrants issued in connection with the company's public offering announced Aug. 1, EpiCept agreed to issue to the investors warrants to purchase up to approximately 2.8 million shares of common stock at an exercise price of 69 cents per share. EpiCept's pipeline includes Ceplene, a cytokine immunomodulator that recently received a positive opinion from the CHMP in Europe for the remission maintenance of acute myeloid leukemia patients, and several pain therapies in clinical development.