Stephen Parker, a partner in Celtic Pharma, said that assuming all milestones are met, the money is sufficient to take the three products through to clinical proof of concept and partnering. "We have a carefully agreed schedule of investments. This means there is the assurance the cash is coming if the milestones are met," he told BioWorld International.
In total the company is raising £13.1 million, with the balance coming from some existing investors.
Novacta has developed a technology platform for manipulating and optimizing lantibiotics, a naturally-occurring class of antibiotic peptides found in a large number of bacteria. Those have shown activity against infections including Clostridium difficile and multidrug-resistant Staphylococcus aureus (MRSA).
The most advanced program is NVB302, against C. difficile, and it is expected to enter the clinic next year. The preclinical data indicate the orally administered product kills C. difficile with minimum impact on other gut bacteria. That may make it suitable for prophylactic use in settings such as nursing homes where C. difficile is prevalent.
The tools for optimizing lantibiotics, and the progression of the C. difficile product to date, have been funded with a £4 million grant from the Strategic Translation Award program of the research charity the Wellcome Trust. With Celtic's investment, Wellcome is converting its interest in Welwyn, UK-based Novacta into shares.
Novacta's pipeline also includes lantibiotics against MRSA and other Gram-positive bacteria, and broad-spectrum antibiotics against Gram-negative bacteria, such as E. coli and salmonella.
Celtic is appointing two of its partners, Richard Garraway and Bob Milsted, to the Novacta board. Current Chairman Andrew Sandham is retiring and will be replaced by the well-known biotech entrepreneur Andy Richards. CEO Tony Sedgwick remains.
The investment matches Celtic's model of taking a majority position in companies with well-differentiated technologies and adding funding, along with pharmaceutical expertise in commercial and regulatory issues. "Access to the expertise at Celtic Pharma will ensure that we develop drugs to the standards looked for by big pharma and maximize their commercial value," Sedgwick said.
Parker said that Celtic currently is assessing investments in three or four other UK companies, and is encouraged by the UK government's plan announced last week to put in £150 million as the cornerstone investor in a £1 billion fund. "It's early days, and it will take several steps before money is being invested, but I would expect a fund like ours to be involved," Parker said.
Celtic Pharma Holdings II already has attracted investment from sovereign wealth funds, pensions funds and high net worth individual, and continues to raise capital.
Novacta Biosystems was spun out of the Biotechnology and Biological Sciences Research Council's John Innes Centre laboratory in 2003. Apart from the Wellcome grant the company has been funded through its services business. However, the services and therapeutics arms of the company were recently split into separate divisions.
