Apogenix AG took in €7.5 million (US$9.6 million) in new investment, plus a further €2.3 million in government funding, to continue clinical development of its lead molecule, APG101, and to fund associated biomarker research.

The total is well below the €27.5 million the company raised in its Series B round back in 2008, but the associated valuation is up.

"It's not a down round," CEO and Chief Financial Officer Thomas Hoeger told BioWorld International, without disclosing the new valuation.

The cash is intended to get the Heidelberg, Germany-based company to the first quarter of 2013, by which time it aims to have secured a partner for APG101. The molecule, a fusion protein comprising the extracellular domain of the CD95 receptor and the Fc portion of an IgG antibody, is undergoing an 83-patient Phase II trial in for glioblastoma multiforme (GBM). Results are imminent.

CD95 (also known as Fas and APO-1) has been characterized as the 'death receptor,' due to its pro-apoptotic effects, which are triggered by binding of the CD95 Ligand (CD95L). In many cancer cells, however, CD95 and CD95L, are expressed constitutively at abnormally high levels, and the resulting signal promotes tumor cell survival and spreading. APG101 acts as a decoy receptor by mopping up CD95L molecules and preventing them from interacting with CD95.

"What we have seen so far with APG101 is there is no safety signal," Hoeger said. "My thinking is that expression of CD95 Ligand is extremely tightly regulated. Normally it cannot be found in a healthy individual – almost none at all."

The company is moving APG101 into a new indication, myelodysplastic syndromes (MDS), a set of conditions caused by deficiencies in red blood cells, white blood cells or platelets, due to problems with myeloid or lymphoid stem cell maturation.

"Many precursor cells die apoptotically," Hoeger said. Inhibiting this process is the therapeutic goal.

Experiments with human bone marrow extracts have provided evidence in support of the concept. Inhibition of CD95L led to a dose-dependent stimulation of erythropoiesis.

"What's more interesting for us is these are patients who no longer respond to erythropoietin," Hoeger said. Administration of the hormone, which stimulates red blood cell production, is standard therapy for some patients.

Apogenix received grant funding from the Bundesministerium für Bildung und Forschung (BMBF; German Federal Ministry of Education and Research) to conduct biomarker research on the use of APG101 in MDS. "We have already identified a couple of potential biomarkers," Hoeger said "We want to confirm the suspects in larger patient numbers."

The aim is to distinguish responders from non-responders among patients classified as being in the low-to-intermediate-1 risk category. These have a low risk of developing acute myeloid leukemia, which is a threat in around 30 percent of patients, but they are dependent on blood transfusions. Moreover, the frequency of transfusion is limited by the risk of liver damage due to iron overload.

Several cytotoxic drugs are already indicated for high-risk patients, including the cytidine analogues Vidaza (azacitidine) and Dacogen (decitabine), marketed by Celgene Corp., of Summit, N.J., and Eisai Co. Ltd., of Tokyo, respectively. Celgene also markets Revlimid (lenalidomide) for low-to-intermediate-1 risk patients carrying the 5q cytogenetic abnormality.

Despite good animal data, the company has halted development of APG101 in graft versus host disease.

"The interest from third parties was not enough, to say the least," Hoeger said. The indication is regarded by many as being too complex. "The pathophysiology is not fully understood," he said.

The company has also halted a program based on blocking interleukin-4 signaling, due to technical difficulties. However, it has initiated another preclinical program, based on finding TRAIL receptor agonists for cancer applications.

The company's existing investors, including controlling shareholder Dievini Hopp BioTech Holding GmbH & Co. KG, the German Cancer Research Center (DKFZ), and the company's founders and management, participated in the new funding round. Since the company was spun out from the Heidelberg-based DKFZ in 2005, it has raised more than €50 million in equity funding and another €8 million in research grants.