Vascular Magnetics Inc.'s co-founder and chief operating officer, Richard S. Woodward, spent the past year with a tin cup in his hand, "looking for money" to get the firm's magnetically targeted drug delivery system for peripheral artery disease (PAD) through a first-in-man study.

That persistence paid off with a $7 million Series A financing from Devon Park Bioventures. Combined with support for a prototype targeting catheter from the Children's Hospital of Philadelphia, the funding will take the product through its first human trial.

"From the beginning, we were hoping to attract a significant amount of venture funding," Woodward told BioWorld Today. "We were quite fortunate to be introduced to Devon Park."

Prior to securing the financing, Woodward said he had been funding the company, which has been running in virtual mode, "on my American Express card."

The technology behind Vascular Magnetics was invented by co-founder Robert J. Levy, a professor of pediatric cardiology at Children's Hospital of Philadelphia.

"It's a great vote of confidence in Dr. Levy's technology that [Devon Park] came in and funded the whole thing," Woodward said.

According to Woodward, more than 80 percent of amputations performed in the U.S. are a result of PAD. Smokers and people with diabetes are at the highest risk, and a diagnosis of PAD marks an elevated risk for heart attack.

The typical current treatment for PAD is balloon angioplasty, but "it doesn't work all that well," Woodward noted.

In the case of coronary artery disease, balloon angioplasty followed by placement of a stent is a fairly successful treatment. But in a peripheral artery, the limb is very mobile. Twisting and turning motions – or even being tackled by a rambunctious grandchild – can result in strut fractures, which may cause re-obstruction of the artery.

Drug-eluting stents have not been shown to work much better than bare metal stents.

"Everything we've seen suggests that 20 to 40 percent of patients need re-intervention within a year," Woodward said.

The Vascular Magnetics technology places a sustained-release drug in the area of lesion within the artery through a catheter. The limb is then placed between the poles of a permanent magnet. The magnet used is relatively small, only one-fifteenth the field strength of a typical clinical MRI.

"This is not one of those giant, clanking cryomagnets that you see when you get an MRI," Woodward explained.

The catheter has a mesh made of a specialized alloy that has the property of superparamagnetism. That develops a strong magnetic gradient in the presence of a magnetic field.

The drug particles have an iron core, which, in the presence of the magnetic gradient, drives them toward the arterial wall. Initially, the company is working with the antirestanotic drug paclitaxel.

"We are completing the development of the prototype catheter. Then we'll be starting studies," said Woodward.

At the same time, Vascular Magnetics will be developing contract GMP manufacturing of particles. Those efforts will converge with initiation of human trials, "which we hope will start sometime in 2014," Woodward said.

The technology can be used in one of three ways. In combination with implantation of a stent, it can allow more effective dosing of the antirestanotic drug to the arterial wall. Second, it can be used in re-treatment of an implanted stent which has caused a re-obstruction of the artery. Third, it can be used as a standalone procedure without stenting.

Vascular Magnetics' intervention technology has applications to other areas of medicine, in addition to treatment of cardiovascular disease. It could also be applied to treatment of airways, gastrointestinal disease and diseases of the genitourinary tract.

Woodward said Vascular Magnetics will be focusing strictly on PAD, because "if you try to do everything, you end up doing nothing."

Woodward said the eventual goal of the company will be partnership or acquisition.

In other financings news:

• Access Pharmaceuticals Inc., of Dallas, filed an S-1 with the SEC seeking to raise $10 million through a registered public offering of common stock and warrants. Access has an approved nanopolymer formulation to manage mucositis known as MuGard. The company also has a nanopolymer DACH platinum prodrug and a nucleoside analogue in Phase II studies, and it is developing a nanopolymer oral drug delivery technology.

• InVivo Therapeutics Holdings Corp., of Cambridge, Mass., reported the full exercise of its overallotment of about 1.2 million additional shares at $2.10 per share, in connection with its underwritten public offering of 8.3 million shares, bringing aggregate gross proceeds from the offering to $20 million. The offering is expected to close on or about Feb. 23, 2012. Aegis Capital Corp. and Summer Street Research Partners acted as joint book-running managers.