DUBLIN – Promethera Biosciences SA raised €9.3 million (US$11.5 million) through a convertible bond issue – the prelude to a larger financing round it aims to complete later this year – and acquired antibody developer Baliopharm AG to strengthen its hand in nonalcoholic steatohepatitis (NASH).

Promethera, of Mont-Saint-Guibert, Belgium, majors in cell therapies directed at liver diseases, employing proprietary human liver progenitor cells, Hepastem and H2Stem, and mature hepatocytes Heparesc. Hepastem is currently undergoing a small-scale phase II trial in patients with acute-on-chronic-liver failure (ACLF), an often-fatal condition characterized by the sudden deterioration in liver function in patients who already have chronic liver failure. A phase IIb trial is planned for later this year.

Its efforts in NASH are at an earlier stage. It will present preclinical work on the anti-inflammatory and antifibrotic effects of Hepastem in animal models at two meetings this month, the International Liver Congress in Paris and the NASH Summit in Boston. A clinical trial of the therapy is penciled in for late 2018.

Promethera also aims to develop a combination therapy for NASH based on Hepastem and a Baliopharm-developed antibody that selectively blocks tumor necrosis factor receptor 1 (TNF-R1). "It's really a NASH-driven strategy that made us decide to acquire this early stage company," Promethera CEO John Tchelingerian told BioWorld.

Financial terms were not disclosed.

Basel, Switzerland-based Baliopharm was formed in 2011 as a spin-off from Basel-based CMO Celonic AG in order to take forward a pipeline of therapeutic programs. Promethera's interest was sparked by the TNF-R1 program, which blocks signaling through TNF-R1 while retaining the protective effects of signaling through TNF-R2. TNF-R1, which is constitutively expressed on most cell types, binds both soluble and membrane-bound forms of TNF and in autoimmune conditions is responsible for the pro-inflammatory and apoptotic effects of TNF-alpha signaling – a process that is the target of the biotechnology industry's best-selling drug class.

"It mediates cell death through the death domain linked to NFkappaB," Tchelingerian said. "Blocking R1 is a good thing, because that's the bad guy."

Expression of TNF-R2, in contrast, is limited to certain cell populations, including T cells, endothelial cells, mesenchymal stem cells and, in the central nervous system, to oligodendrocytes and certain species of neurons. On activation – by membrane-bound TNF only – it promotes cell growth and survival.

Baliopharm has previously positioned atrosab, a humanized IgG antibody with reduced Fc effector functions, as a more selective agent for treating autoimmune disease than TNF-alpha inhibitors. It conducted a phase I trial several years ago, although that strategy has not progressed any further. Atrosimab is a single-chain variant, which Promethera plans to prioritize. The program is still early stage. "We will need another 24 months to bring this to IND level," Tchelingerian said.

Promethera also obtained its lead product, Heparesc, through an acquisition – that of Weinheim, Germany-based Cytonet GmbH & Co KG, which developed the therapy for treating urea cycle disorders. Although twice rebuffed by the EMA, the therapy has been undergoing regulatory review in Canada for the past year.

"Heparesc was filed with Health Canada at the end of April 2017. We expect to hear back from them at the end of the month," Tchelingerian said. Cytonet's U.S. subsidiary, located in Durham, N.C., is starting to generate a revenue stream through the supply of research reagents isolated from cadaveric livers.

Promethera's major shareholders participated in the bond issue. It also brought in two Japanese investors, Kanazawa, Japan-based Shibuya Corp., which entered a manufacturing agreement with the Belgian firm last year, and Tokyo-based Shinsei Group, which had previously invested indirectly through Cell Innovation Partners LP, a joint venture with Yokohama-based Reprocell Inc.