West Coast Editor

Investors found the "chemistry" just right in Scynexis Inc. and came together in a synthesis of U.S. and European venture funds that contributed $29 million to the company's efforts in synthesis chemistry.

Scynexis (and Scynexis Europe Ltd., of Cambridge, UK) works on drug discovery through chemists' research coupled with technologies called Medchem-Factory and the Hit Explorer Operating System.

"We aren't nebulous or way over the horizon," said Terry Marquardt, director of business development for Research Triangle Park, N.C.-based Scynexis. "We're generating income now, and we have a plan for fee for service and we can migrate into research collaborations where we have part ownership" of compounds.

It's all about high-speed synthesis and automation. Medchem-Factory allows the synthesis of compounds in high quantities, and Scynexis boasts that its methods can carry out the directed synthesis of drug-like hit generation compounds, as well as perform hit explosion and lead optimization services.

"The HEOS software system is the engine we use to give our compounds drug-like properties, and the automation technology allows us to make many thousands of compounds rapidly," Marquardt said.

Founded in July, Scynexis started with 24 employees and now has about 100, with 40 in the UK office, he said.

"We offer a part of the drug development equation that goes from design all the way through to the production of active ingredients for clinical samples," thus avoiding some investor skepticism that besets firms involved in the earlier stages of drug discovery, he told BioWorld Today.

"There's a lot of pressure out there," he said.

Among Scynexis' customers is Berkeley, Calif.-based Plexxikon Inc., which takes aim at leads for druggable targets by using an arsenal that includes bioinformatics tools, high-throughput co-complexing of ligands with proteins, large-scale protein production, high-throughput co-crystallization, use of surrogate proteins and in silico methods, and automated co-structure determination. (See BioWorld Today, March 14, 2002.)

Scynexis has "about 25 customers currently," Marquardt said. "The base is roughly half and half mid-to-large pharmaceutical companies and smaller [biotechnology firms]." The deals generally are valued in the $50,000 to $100,000 range to the $3 million to $5 million range per transaction.

"We'll continue with the fee-for-service type of business, but we'll also continue to move more into collaborations and drug development," Marquardt said, noting that the firm expects to disclose a major deal with a large pharmaceutical firm next week. Financial terms won't be provided, but the benefit to Scynexis will be significant and "not the little crumbs" sometimes paid, he added.

The latest round of financing, which is Scynexis' largest so far, was led by Alta Partners, of San Francisco. Among new investors were Burrill & Company, of San Francisco; SR One, of West Conshohocken, Pa.; CDC Innovation Partners, of Paris; and KBL Healthcare Ventures, of New York. Also participating were Scynexis' original investors Genavent, SG Asset Management, and Ventech, all of Paris.

"We were able to locate and get interest from what we consider are the top players in the biotech area," Marquardt said. "They're well familiar with the industry, and they understand the risks as well as the value of good technology."