Staff Writer

Symphogen A/S, of Copenhagen, Denmark, has raised what it said is the largest financing ever for a private European biotech company with a $131 million preferred stock placement.

Symphogen CEO Kirsten Drejer told BioWorld Today that the placement surpassed a $98.5 million funding round in March 2010 by Archimedes Pharma Ltd., of Reading, UK.

Drejer said that investors Novo A/S and Essex Woodlands Fund VIII led the round, with each investing 35 percent of the total. Danish Pension Fund PKA invested 19 percent, and three other groups invested between 3 percent and 5 percent of the total, which is scheduled over three equal tranches.

Drejer said it is the company's fifth round of financing. Symphogen's last round was in February 2009, when it raised $42.4 million from existing investors. (See BioWorld Today, Feb. 5, 2009.)

But it would not be accurate to describe the latest round as venture funding, she explained. Rather, it is a hybrid of venture and public offering models. The venture capital and initial public offering funding routes have been so challenging during the past two years that it made sense to offer preferred stock to institutional investors, she said.

"The venture capital model did not fit, so we decided to go for funding with institutional investors," she said. "It resembles an IPO, but we do not have all of the burdens linked to an IPO." She did not interpret the size of the round as a sign that the biotech investment climate is improving.

"I cannot answer if the climate has improved," she said. "I think the reason we were able to pull off significant financing is that our investors have been with us for many years and have seen that we can deliver year after year. Their willingness is linked to our progress, and we have established a trust relationship with them. What I hear from other companies is that it is still very tough these days."

The funds should support the company for the next four to five years, Drejer said. The company currently has about 80 employees and hopes to attract chief scientific and medical officers to the management team, but does not expect to grow beyond 100 people.

Symphogen, which develops recombinant polyclonal antibodies for the potential treatment of cancer and infectious disease, will use the proceeds to advance its lead clinical oncology product Sym004, which is in Phase I/II trials in the U.S. and Europe, and other clinical and preclinical oncology opportunities. Sym004 is composed of two anti-epidermal growth factor receptor monoclonal antibodies targeting different non-overlapping EGFR epitopes.

The Phase I/II trial began in the U.S. in April 2010 to evaluate the safety, tolerability and efficacy of Sym004 for the treatment of advanced solid tumors. Data from the first part of the two-part trial are expected in early 2011, and a Phase II extension of the trial is expected soon after, the company said. In both parts, Sym004 will be administered intravenously once weekly. In one part, Sym004 will be studied in a heterogeneous population of patients with refractory or recurrent advanced solid tumors and late-stage cancer. In the second, the maximum-tolerated dose will be studied in patients with refractory or recurrent advanced metastatic colorectal cancer and the wild-type form of the KRAS protein.

Last week full development rights for the company's Sym001 for immune thrombocytopenic purpura (ITP) treatment and for hemolytic disease in newborn (HDN) prophylaxis were returned by Swedish Orphan Biovitrum AB, of Stockholm, Sweden. Sym001 is currently in Phase II trials for treatment of ITP and in anti-D prophylaxis to prevent HDN. Phase II data is expected to be reported late in 2011, the company said.

The Sym001 program is based on Symphogen's recombinant polyclonal technology and had been jointly developed since 2006, from early preclinical to its current clinical phase. Swedish Orphan said it decided to opt out of the program to focus on its late-stage development pipeline.

Symphogen also announced that Goran A. Ando will become chairman of the company's board of directors. Ando is vice chairman of the board of Novo Nordisk, a senior advisor to Essex Woodlands and serves on the board of Novo A/S.

In other financing news:

• Allon Therapeutics Inc., of Vancouver, British Columbia, said it has notified YA Global Master SPV Ltd. that it intends to draw down $200,000 under its previously announced $10 million standby equity distribution agreement (SEDA). According to the SEDA provisions, YA will subscribe for common shares at a 5 percent discount to the five-day weighted average price of Allon shares for the period ending on or about Jan. 12.

• LifeCycle Pharma A/S, of Hørsholm, Denmark, announced that it completed its fully subscribed rights offering of 395,974,671 new shares, raising net proceeds of approximately $79 million. The funds will be used primarily to complete the Phase III program of LCP-Tacro, a once-daily formulation of immunosuppressant drug tacrolimus.

• Pro-Pharmaceuticals Inc., of Newton, Mass., closed a private placement for gross cash proceeds of approximately $2.1 million for shares of its Series C superdividend convertible preferred stock. The company said it sold 212 shares at $10,000 per share, convertible into 2.1 million shares of common stock at an above market price of $1 per share. The company said it may require conversion when the trading price of its common stock is not less than $3 for at least 15 trading days.