As it prepares for clinical trials of its lead product, ESBATech AG closed a Series B round, bringing the Swiss company $41 million.
Based in Zurich, ESBATech was formed in 1998 as a spin-off from the Institute of Molecular Biology at the University of Zurich.
Since then, it has worked to develop its antibody-fragment technology, which identifies naturally occurring, fully human fragments that do not aggregate and have benefits of high solubility, stability and production yield.
Funds raised from the Series B should carry ESBATech for three years, at which time the company might consider an initial public offering or a trade sale, said President and CEO Dominik Escher. Lead investors included Boston-based SV Life Sciences; Cambridge, Mass.-based Clarus Ventures; and HBM BioVentures and HBM Capital, two funds managed by HBM Partners AG, of Grand Cayman, Cayman Islands. Series A investors Novartis Venture Fund and BioMedinvest AG, both of Basel, Switzerland, and VI Partners, of Zug, Switzerland, also participated.
"It's the largest financing round the company has completed," Escher told BioWorld Today, adding that the money "enables us to develop our [lead] product into the clinic and to show proof of concept in a Phase IIa."
ESBATech intends to start the first clinical trials of ESBA105 in 2007.
The product, which is directed against TNF-alpha, is expected to exhibit higher safety levels compared to systemically administered TNFa antagonists, such as Enbrel (Amgen Inc., Thousand Oaks, Calif.) and Remicade (Centocor Inc., Malvern, Pa.). Delivered locally, ESBA105 has a systemic half-life of five hours compared to Remicade's 16-day half-life.
The company expects to pursue two undisclosed inflammatory indications through a couple of Phase IIa trials. For one indication, because of its large size and pharmaceutical company interest, ESBATech likely will take on a partner. For the other, it hopes to develop it to the point of approval, building an internal sales force.
"For smaller indications, we think the company should be in a position to pursue clinical development on its own," Escher said.
Earlier-stage products include a preclinical compound for Alzheimer's disease and the preclinical oncology candidate ESBA521, for which ESBATech is seeking a partner.
The company has screened about 1.5 million naturally occurring antibody fragments to find about 50 stable ones that form the basis of its research. Escher believes antibody fragments are attractive alternatives to antibodies because they can neutralize a target without provoking an immune response.
In June, South San Francisco-based Genentech Inc. received approval of the first antibody fragment therapeutic, Lucentis (ranibizumab), to treat wet age-related macular degeneration. Sales of the product are expected to grow to almost $1 billion by 2010.
Currently, there are 18 antibodies on the market, "and 50 or more in various clinical development stages," Escher said, "and the antibody space was the most successful pharmaceutical sector" last year.
In addition to the $41 million raised this week, ESBATech has pulled in about CHF20 million (US$16.2 million) in private money, including CHF14.5 million from its last financing round in May 2002.
With the Series B, SV Life Sciences' Graham Boulnois, Clarus' Michael Steinmetz and HBM Partners' Ulrich Geilinger are joining ESBATech's board.
Acceleron Secures $30M In Series B
Acceleron Pharma Inc. completed a Series B, raising $30 million to advance ACE-011 and other programs in the areas of musculoskeletal, metabolic and cancer-related diseases.
New investor OrbiMed Advisors, of New York, led the round, which included participation by all existing investors, including Advanced Technology Ventures, Flagship Ventures, Polaris Ventures, Sutter Hill Ventures and Venrock Associates.
The Cambridge, Mass.-based company last raised $26 million in a Series A round conducted in February 2004.
"Over the last two years, we were able to move our first product from concept into the clinic," said CEO Glenn Batchelder, "and we have a number of additional molecules that are just entering development now that we would expect to take into the clinic over the next 18 months or so."
ACE-011 has demonstrated potential to fundamentally change the treatment of bone loss by rebuilding bone. It is being developed for diseases such as osteoporosis and cancer.
Acceleron's platform focuses on harnessing the regenerative powers of naturally occurring tissue growth factors from the growth and differentiation factor (GDF) and bone morphogenetic protein (BMP) families.
"The simple way of describing it is your body has both positive and negative regulators of tissue," Batchelder told BioWorld Today. "We're able to go in and inhibit the negative regulators of bone," allowing the positive regulators to restore bone to a healthy state, "and with muscle, it's the same thing."
Most products on the market for osteoporosis aim to slow bone loss, with the exception of parathyroid hormone (PTH), which does have some anabolic effect. But ACE-011 takes the body's "natural regenerative system" to regrow bone, Batchelder said.
There are no products on the market addressing muscle loss, which occurs with age and makes people more susceptible to falls and immobility. Acceleron's lead product in the space is ACE-031, one of two products that the company expects to soon move into the clinic. The product also may show a benefit in patients with amyotrophic lateral sclerosis and muscular dystrophy.
The second candidate slated for clinical development within 18 months is the oncology drug ACE-041, a GDF antagonist that blocks angiogenesis, even in anti-VEGF resistant tumors.
Acceleron expects to partner its products for larger indications, such as osteoporosis, but it hopes to commercialize products itself for smaller indications, such as bone loss associated with cancer and cancer treatments.
In connection with the financing, Orbimed's Carl Gordon is joining Acceleron's board. The $41M in funds is expected to last the company through the end of 2008.
In other financing news:
• Biodel Inc., of Danbury, Conn., raised $21 million in a Series B round led by Great Point Partners, OrbiMed Advisors and Vivo Ventures. Great Point's David Kroin, Vivo's Albert Cha and OrbiMed's Samuel Wertheimer are joining Biodel's board. The company's first product is the rapid-acting injectable insulin Viaject, which is intended to speed the delivery of insulin into the blood. Leerink Swann & Co. and McGinnSmith & Co. acted as placement agents.
• Esprit Pharma Inc., of East Brunswick, N.J., completed a Series B round, raising about $90.8 million, with participation from New Enterprise Associates, Apax Partners Inc., Domain Associates LLC and Montagu Newhall Global Partners, as well as new investors Oak Investment Partners and clients advised by Performance Equity Management. The company focuses on identifying and acquiring approved and late-stage development medicines for specialty markets.
• Taligen Therapeutics Inc., of Aurora, Colo., attained the development milestone required to trigger the funding of the second tranche of its Series A financing. The $3.75 million financing initially closed in August and was led by Sanderling Ventures, with participation from Tango and High Country Venture and the University of Colorado through University License Equity Holdings Inc. The company achieved the milestone by demonstrating in vivo efficacy of a humanized version of its lead compound, TA106, which it is developing for severe, persistent asthma. It intends to file an investigational new drug application for the product in 2007.