BioWorld International Correspondent

Santaris Pharma A/S raised €20.4 million (US$29.4 million) in a new investment round led by Gilde Healthcare Partners BV, of Utrecht, the Netherlands, which contributed €7.5 million of the total.

Gilde is the sole new addition to Santaris' roster of investors, as the company's existing investors all were keen to participate and to minimize any dilution, CEO Keith McCullagh told BioWorld International. "The board felt that that we needed a new investor to set the price," he said.

The company gained a post-money increase in valuation of about 50 percent, he added, and now is valued at almost €120 million on a fully diluted basis.

Keeping the company's valuation moving forward was an important consideration in the round, McCullagh said, as Santaris wants to undertake a relatively large-scale initial public offering when it does goes public.

"All our peer group are valued in billions, and it seems silly that we should consider an IPO at a conventional price," he said.

Hørsholm, Denmark-based Santaris is developing RNA antagonist drugs based on its proprietary Locked Nucleic Acid (LNA) chemistry, which is designed to yield synthetic oligonucleotides with high stability and high-binding affinities. "I think we have the chemistry, the lab data and the animal data to show that our technology is better than anybody else's," McCullagh said.

Its lead compound, SPC2996, which targets the apoptosis suppressor Bcl-2, is finalizing the second of two Phase I/II trials in chronic lymphocytic leukemia. It will enter a 100-patient Phase II trial in B-cell lymphoma - and indication with better commercial potential, McCullagh said - during the first half of 2008.

The company also will take two more compounds into the clinic during 2008. One, an antagonist of Apolipoprotein B-100, is in development for severe hypercholesterolemia. It is a direct competitor to Carlsbad, Calif.-based Isis Pharmaceuticals Inc.'s mipomersen (ISIS 301012), which completed Phase II studies earlier this year.

The other compound is what McCullagh described as the first microRNA (miRNA) antagonist likely to reach the clinic. Instead of developing oligonucleotides to mimic miRNAs and turn off expression of particular genes, the approach involves inhibiting the activity of miRNAs that play a role in disease pathology by developing complementary sequences that bind them and prevent them from hitting their targets.

The first such compound, SPC3649, antagonizes miRNA-122, a molecule expressed in liver tissue. "It appears to coordinate and down-regulate the genes which control excess metabolism in the liver," McCullagh said.

SPC3649 has exhibited dramatic and sustained effects on lowering cholesterol in primate studies, which the company will publish shortly. It also appears to be essential for pathogenesis of hepatitis C virus infection and, therefore, might have potential as an HCV therapeutic as well.

However, miRNA-122 is primarily "a model system" for Santaris, McCullagh said. The company's main focus in miRNA antagonism is its potential to disrupt miRNAs that have oncogenic or cancer-causing effects.

The company is working with several academic collaborators in that area, including Gregory Hannon and Scott Lowe, of Cold Spring Harbor Laboratory in Cold Spring Harbor, N.Y.; Anna Krichevsky at Harvard Medical School in Boston; and Carlo Croce at Ohio State University in Columbus, Ohio.

"MicroRNA antagonists could become an entirely new class of drug," McCullagh said. "We're the first company to get a product anywhere close to the clinic."