BioWorld Today Correspondent

Santaris Pharma AS raised €20.4 million (US$29.4 million) in an investment round led by Gilde Healthcare Partners BV, which contributed €7.5 million to the total.

Gilde, of Utrecht, the Netherlands, is the only new addition to Santaris' roster of investors. Existing investors were keen to participate and wanted to minimize any dilution, said Santaris CEO Keith McCullagh. "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, McCullagh 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 - an 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, that 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 of Harvard Medical School in Boston; and Carlo Croce of 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."

In other financings news:

• Deltanoid Pharmaceuticals Inc., of Madison, Wis., raised $12 million in a Series B financing, bringing its total funding raised to date to more than $16 million. The Series B round was led by the Wisconsin Alumni Research Foundation and included Mason Wells and Venture Investors LLC, as well as an undisclosed corporation, the company founders and angel investors. Proceeds will be used to advance clinical and preclinical development of Deltanoid's vitamin D analogues.

• Elixir Pharmaceuticals Inc., of Cambridge, Mass., set terms for its previously proposed initial public offering. The company plans to sell 5 million shares priced between $14 and $16 per share, the midrange of which would generate $75 million in gross proceeds. Underwriters Credit Suisse Securities LLC, Pacific Growth Equities LLC and Leerink Swann LLC will have the option to purchase up to 750,000 additional shares to cover any overallotments. Elixir, which has two diabetes drugs in pivotal trials, plans to list on the Nasdaq under the ticker "ELXR." (See BioWorld Today, Sept. 25, 2007.)

• Lixte Biotechnology Holdings Inc., of East Setauket, N.Y., closed a private placement of 1 million shares sold at 65 cents apiece for gross proceeds of $650,000. WestPark Capital Inc. acted as placement agent and received five-year warrants to purchase up to 100,000 shares plus five-year incentive warrants to purchase up to additional 20,000 shares. Net proceeds will be used to pursue development of compounds in preparation for Phase I testing and for working capital. Lixte, founded in 2005 as a biomarker-diagnostics company, develops new chemotherapy drugs targeting molecular abnormalities of common human cancers.

• Titan Pharmaceuticals Inc., of South San Francisco, Calif., is raising $21.3 million through the private placement of 13.3 million shares priced at $1.60 each, the company's closing price on Monday, as well as warrants to purchase an additional 6.65 million shares priced at $2 each. Canaccord Adams Inc. and Rodman & Renshaw LLC served as placement agents for the transaction. Titan is developing a pipeline of mid- to late-stage drugs for neurological and other disorders.

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