Staff Writer

As it prepares to move at least three cancer products into the clinic next year, Reata Discovery Inc. closed a $12 million Series C private financing round.

The funds should carry the Dallas-based company through at least the next two years of expenses, said its president and CEO, Warren Huff.

"It depends on how much success we have," Huff told BioWorld Today. "The more that things are successful in the clinic, the quicker we'll burn through the money. But under our plan this will take us through most of 2006 with three drugs in early clinical trials."

Dallas-based firms Cardinal Investment Co., Ojai Goliad and StarTech Ventures, as well as other undisclosed institutional and individual investors, participated in the round. The group included both new and existing investors.

Reata has several small-molecule cancer drugs in development. The lead molecules were licensed from research institutions such as The University of Texas Southwestern Medical Center, The University of Texas M.D. Anderson Cancer Center, Dartmouth College and the National Cancer Institute.

Reata intends to file investigational new drug applications for two compounds within the next six months. A third IND will be filed in the second half of 2005.

The first compound expected to enter the clinic is RTA 744, an anthracycline derivative. The company plans to begin clinical testing of the drug during the first quarter of 2005.

"That's a novel anthracycline that gets through the blood-brain barrier," Huff said. "And we're using it initially to treat primary brain cancers."

The second product set to enter the clinic is new - Reata in-licensed it earlier this month. The company gained exclusive worldwide rights to a new class of cancer compounds that include RTA 401 in an agreement with Dartmouth College and The University of Texas M.D. Anderson Cancer Center. RTA 401 is expected to move into the clinic sometime in the first half of 2005. The product is designed to disrupt cancer cells' ability to respond to oxidative stress and it marks the cells for death through caspase and non-caspase mediated mechanisms. It was first synthesized by investigators at Dartmouth College and later developed with M.D. Anderson and the National Cancer Institute. RTA 401 and its analogues are based on compounds found in medicinal plants.

"It's got broad application for the hematological malignancies and the solid tumors," Huff said. "We're probably going to start the Phase I in hematological malignancies."

A third compound, RTA 502, is slated for an IND filing in mid-2005. It is the lead compound from a new class of drugs that inhibit topoisomerase I and also inactivate the kinases PI3K and AKT. The compound has shown significant in vivo activity against colon, liver and pancreatic cancers.

Aside from those first three clinical candidates, Reata is developing RTA 203 and RTA 301. The first is an inhibitor of the vacuolar ATPase, which is believed to play a significant role in cancer cell biology. It has shown potential for managing late-stage cancers with drug and radiation resistance. The second compound, RTA 301, is a microtubule stabilizing agent that binds tubulin at a different site than paclitaxel and other existing drugs. It has in vitro and in vivo activity and retains the activity in taxane-resistant and multidrug-resistant cell lines. Those products could move into the clinic late next year, Huff said.

Reata also has its own drug-screening technology, called RPM (rescuing proteins from misfolding). The technology identifies small molecules that can act as chemical chaperones and restore the function of the mutant tumor suppressor protein, p53.

"It's very well established that a big problem in most cancers are that the tumor suppressor gene and protein p53 is not functional in most cases because the protein is misfolded because of mutations," Huff said.

Founded in fall 2002, Reata has raised $18.2 million since inception. The company owns all rights to all of its products. While the general plan is to find partners for late-stage clinical development and commercialization, Huff said Reata wouldn't mind building its own sales force and commercializing some of its own compounds.

"We have big aspirations, like everybody else," he said.