In its first major financing round since being incorporated five years ago, Argolyn Bioscience Inc. closed a Series A-1 round of $15.8 million to support ongoing development of its preclinical programs in the areas of psychosis and pain.
Based in Charleston, S.C., Argolyn was founded in May 2002, it's name a combination of arginine and lysine, two amino acids that relate to the company's core technology. That technology was developed by Thomas Dix at the Medical University of South Carolina and is aimed at creating more effective peptide-based drugs by modifying the amino acids within peptides to improve efficacy, said Pearce Gilbert, CEO.
While peptides are attractive as drugs, due to their specific functions and low side-effect profiles, they also are inherently unstable. Argolyn's approach involves replacing the peptide's natural amino acids with amino acid derivatives designed to prevent the peptide from quickly degrading in the body, making sure "it gets where it needs to go," said Gilbert, who first got a look at Dix's technology while working at the university's technology transfer office, before coming on board as CEO.
"It looked like it had start-up potential," he told BioWorld Today. "So we put in for some NIH grant money and we were off to the races."
To date, Argolyn's work has been funded by about $4 million, half of which came from grants from the National Institutes of Health, including a $1.35 million Small Business Innovative Research grant in 2005 to support preclinical work on ABS201, a compound for schizophrenia. The company also was the first to be awarded funding under the 2005 South Carolina Innovation Center legislation, receiving a $200,000 check from the South Carolina Research Authority last year to fund research and operations.
Funds from the recent Series A are expected to last "a few years," Gilbert said, and will be used to advance ABS201 and a second preclinical compound for pain into the clinic and to validate the technology platform.
"We'd like to advance these early compounds as far as we can" before seeking partners for late-stage development and commercialization, he said. The company likely also will look for collaborative opportunities involving the use of its technology on peptide compounds owned by other companies.
Durham, N.C.-based Intersouth Partners and Philadelphia-based Quaker BioVentures led the financing, with participation from Thousand Oaks, Calif.-based Amgen Ventures. Dennis Dougherty, of Intersouth, and Geeta Vemuri, of Quaker BioVentures, will join Argolyn's board, which already includes James McNab, W. Thomas Amick and C. Thomas Caskey.
In other financings news:
• AtheroGenics Inc., of Atlanta, extended the maturity of a significant portion of its convertible debt from 2008 to 2011. Under the terms, the company said that $38 million in notes due 2008 will be exchanged for $60.4 million in new notes due March 1, 2011, with the interest rate and conversion price on the new notes unchanged at 4.5 percent interest with a $15.34 conversion price. The restructuring of that debt obligation is part of AtheroGenics' updated business plan to advance the development of AGI-1067 in diabetes. Late last month, the company agreed to cut about half of its workforce and to shift the focus of AGI-1067, its lead small molecule, from atherosclerosis to diabetes. A Phase III diabetes study is expected to start in the third quarter. Shares of AtheroGenics (NASDAQ:AGIX) closed at $2.16 Monday, down 4 cents. (See BioWorld Today, June 1, 2007.)
• MicuRx Pharmaceuticals Inc., of Union City, Calif., completed its Series A financing with a $10 million investment from Morningside Group, a Hong Kong investment group. The company, which discovers and develops anti-infective drugs with improved pharmacological profiles, focuses on modifying validated antibiotics to overcome resistance, as well as to improve the dosing regimen and reduce side effects.
• Probiodrug AG, of Halle, Germany, and Ingenium Pharmaceuticals AG, of Munich, Germany, closed a €20.6 million (US$27.6 million) Series A financing, concurrent with the companies' merger. Money will be used to support the development of a pipeline of compounds aimed at Alzheimer's disease and chronic inflammatory diseases. TVM Capital and HBM BioVentures (Cayman) Ltd. participated in the financing, along with IBG Beteiligungsgesellschaft Sachsen-Anhalt mbH, Sachsen LB Corporate Finance Holding GmbH, tbg Technologiebeteiligungsgesellschaft, TechnoFonds Bayern, Probiodrug management and Probiodrug Chairman Georg Frank. Probiodrug, which develops small-molecule inhibitors for inflammatory and neurodegenerative diseases, acquired Ingenium to help create a fully integrated company, adding a facility, as well as experience in biology-based discovery and animal pharmacology. Following the merger, Probiodrug will retain Ingenium's Munich location and certain staff, minus executive management.