LONDON – Apitope Ltd. is busy drawing up the business plan for a double-digit financing round to take its next two projects through Phase I development after triggering a key clinical milestone in its lead multiple sclerosis program.

The autoimmune disease specialist is in the process of selecting the lead candidate in the two programs, against Factor VIII intolerance and Graves' disease. "We are looking to do the private placement early next year. We want funds to get the two products to the end of Phase I, so a reasonable amount is needed for that," Keith Martin, CEO, told BioWorld International.

He said he hopes investors will be inspired by the company's progress with its lead program, ATX-MS-1467, which is partnered with Merck Serono SA. The last patient has now been recruited to the second Phase I trial, triggering an undisclosed clinical milestone payment to Apitope.

That 40-patient study in relapsing multiple sclerosis follows the successful completion of an earlier Phase I in six patients with the secondary progressive form of the disorder. Receiving the milestone has provided a validation of the company's eponymous Apitope (Antigen Processing Independent Epitope) technology for the discovery of disease-modifying peptides. It's designed to generate soluble, synthetic human peptides that can selectively suppress abnormal immune responses.

ATX-MS-1467 was partnered with Merck Serono in a $203 million deal in January 2009. Under the terms of the agreement, Merck Serono will pick up all development work once Phase II begins. (See BioWorld Today, Jan. 14, 2009.)

"We have pretty much finished the [second] Phase I now, though we have not completed the analysis yet. There are an awful lot of parameters we are looking at to plan for Phase II," Martin said.

"The fact that we have reached this stage and triggered this milestone is a clue things have gone very well, but the final decision on moving to Phase II rests with Merck Serono," Martin added.

There has been fundamental change at Merck Serono since the relationship with Hasselt, Belgium-based Apitope got off the ground.

At that time, in January 2009, the multiple sclerosis franchise of Merck Serono was riding high, with its blockbuster interferon-beta-1a product Rebif about to be joined on the market by an oral multiple sclerosis treatment Movectro (cladribine), a purine analogue.

Although approved in Russia and Australia, concerns voiced by the FDA and the European Medicines Agency, coupled with growing competition in oral multiple sclerosis drugs, led Merck Serono to drop Movectro in June 2011.

Following that disappointment, the parent company Merck KGaA announced it was shutting down the Merck Serono headquarters in Geneva in April this year, axing 1,250 jobs at the site, which previously led the multiple sclerosis programs.

Martin said the collaboration has not been unduly disrupted by those events. "They closed the Geneva [facility], but we continue to work with people in the global organization, in Darmstadt, [Germany] and in the U.S., and some of the Geneva people are moving to other Merck sites. It's now three years into the relationship, and you would have expected some changes by now," Martin said.

Alongside working on the private placement, Apitope will be looking to partner its Graves' disease and Factor VIII programs, as well as another preclinical product for treating uveitis. "All are open for licensing, and of course, we are always trying to license, but now that in two of the three we are close to finalizing the lead candidate, we will be stepping up a gear to find partners," Martin said.

There is extremely high unmet need in each of the three indications and the possibility of orphan drug designations. "The competition in terms of competing products in development is low, so there is some good space here for large pharma," Martin said.