Serentis Ltd. raised £10.3 million (US$20.8 million) in a Series A financing round to advance development of its programs.
The Cambridge, UK, company has an initial focus in the areas of wound care/dermatology and cancer supportive care, with additional research programs in fibrotic disease and diabetic complications.
The company, formed a year ago by executives from Little Chesterford, UK-based Arakis Ltd., has adopted a similar business model of finding new indications for existing drugs based on new biological insights.
However, founding CEO Tim Sharpington said that after reaching clinical proof of principle in the new indication, the aim will be to chemically modify compounds to produce novel chemical entities.
"We will have all the low risk of working with known pharmacology, but the value of NCEs," he said.
Co-founders of Serentis in addition to Sharpington were Alan Rothaul, chief scientific officer, who was head of biological sciences at Arakis, and Andy Baxter, research and development director, who was discovery director at Arakis. The Japanese firm Sosei Co. Ltd acquired Arakis for £106.5 million in July 2005. (See BioWorld Today, July 20, 2005.)
The venture capital investors, who also provided seed funding to Serentis, are MVM Life Science Partners, Apposite Capital and Novo A/S, the venture arm of the Danish pharmaceutical company Novo Nordisk A/S.
Serentis has two products in its portfolio: Ser-1 for treating chemotherapy-induced mucositis and Ser-3, a dual-action wound-care treatment that is expected to act as an analgesic and to have a healing effect. Both are administered by intravenous injection and will be reformulated for topical application.
Sharpington is looking to in-license further products, or may decide to advance in-house projects into the clinic. "We are evaluating our own projects against licensing opportunities to get the best balance in the portfolio," he said. In addition to wound healing and adjunctive cancer therapies, Serentis has interests in diabetic complications and fibrotic disorders.
The commercialization strategy will vary from product to product. "Some we would expect to out-license at Phase II because they are big pharma plays, which a company like us would struggle to take to registration," Sharpington said. "Others are not out of reach, so we may be able to take them further."
Martin Murphy, a partner at MVM Life Science and chairman of Serentis, in a news release said: "The management team at Serentis have an impressive track record of innovating and developing low-risk development compounds, which can be rapidly progressed to proof-of-principle studies. We are pleased to be able to support the company in order to allow expansion of the management team and progression of the lead compounds."
In other financing news:
• Diatos SA, of Paris, closed on a €9.4 million (US$12.8 million) financing round, bringing to €54.8 million the total equity capital raised by Diatos since its inception in 1999. Funds will be used on development of its products, including the paclitaxel depot-formulated polymer gel DTS-301, which is nearing a Phase IIb/III trial in esophageal cancer; the doxorubicin prodrug DTS 201, which has completed a Phase I trial in solid tumors; and DTS-108, a second-generation irinotecan in preclinical studies. The round was led by existing investors including GIMV, Credit Agricole Private Equity, InterWest Partners, Innoven Partenaires, Sofinnova Partners and Biotech Fund Flanders. Also participating were AGF Private Equity, NIF SMBC, Sopartec and SGAM.
• Emergent BioSolutions Inc., of Rockville, Md., signed a $30 million loan agreement with HSBC Realty Credit Corp., funds that primarily will be used for its manufacturing expansion in Lansing, Mich. The deal replaces a prior loan arrangement with HSBC under which HSBC agreed to loan the company $15 million, consisting of a $10 million term loan and a $5 million revolving line of credit. The new $30 million loan carries a term of five years, an interest rate of 30-day LIBOR plus 2.75 percent, an amortization rate based on a 10-year schedule, and a balloon payment at the conclusion of the loan term. Emergent has an approved product, BioThrax, for preventing anthrax infection, and is developing other immunobiotics-based programs.
• BrainStorm Cell Therapeutics Inc., of New York, entered into an agreement to raise up to $5 million from ACCBT Corp., a company under the control of Chaim Lebovits. Investments will be made in installments as the company advances its technologies and research in the area of adult stem cells. Assuming ACCBT completes all of the contemplated investments, it would acquire and own a majority of the outstanding common stock and warrants of the company. The first installment is expected to close by Aug. 30. The company also appointed Lebovits as its president.