With the first closing of its Series A round, Protemix Corp. Ltd. became the latest New Zealand-based biotech successfully to reach the U.S. and European investment markets.

The company, which has a facility in San Diego but maintains the majority of its operations in Auckland, raised $14.5 million and anticipates adding between $7.5 million to $10 million in additional Series A funding later this year.

It's the first institutional round for Protemix, a late-1990s start-up by New Zealand scientist Garth Cooper, who, a decade before, had co-founded San Diego-based Amylin Pharmaceuticals Inc.

After leaving Amylin, Cooper returned to New Zealand to work at the University of Auckland's School of Biological Sciences, where his work, involving the study of metabolic processes, formed the basis of Protemix, which focuses on developing compounds for cardiovascular disease, diabetes and other metabolic disorders.

The company was formally established in 1999, with support from angel investors, and later funding from high-net-worth individuals in the New Zealand market, said David Pool, Protemix's chief operating officer.

Keeping close ties to the university - the company's scientists use university labs for ongoing research - has been a "real benefit" in keeping costs down while pursuing research and early stage work, Pool said. "It gives us access to infrastructure that would be difficult [to attain] without strong funding."

The company's presence in New Zealand also qualifies it for various government grants, which are akin to grants awarded by the National Institutes of Health in the U.S. That government support helps firms get to the point "where they are attractive to U.S. capital markets," Pool told BioWorld Today.

Several other New Zealand companies are following a similar model, including CoDa Therapeutics Inc., which recently reported the second closing of a $20 million Series A round, and Proacta Inc., which pulled in $35 million in Series B funding. Both companies are based in San Diego but also maintain facilities in New Zealand. (See BioWorld Today, Feb. 8, 2007, and Feb. 22, 2007.)

Protemix plans to use its recent funding to advance the development of its two lead programs, starting with PX811019, an oral compound for treating diabetic heart failure. The drug, which uses a "refined" formulation of trientine hydrochloride, the active chemical agent in the Wilson's disease drug Syprine (Merck & Co. Inc.), is designed to reduce the abnormal accumulation of copper in the heart muscle, Pool said. In preclinical and early clinical studies "we've seen regeneration of heart muscle in diabetic patients" receiving PX811019, as well as a "significant reduction" in elevated left ventricular heart mass.

Protemix completed Phase I testing and expects to enter Phase II testing this year. The company also intends to explore PX811019's use in additional indications.

Behind that program is a preclinical candidate, PX811013, an active form of adiponectin, a glycoprotein hormone believed to play a "significantly wide role in metabolic disease," Pool said.

The company's research has demonstrated that PX811013 appears to reverse alcohol-mediated and non-alcoholic liver damage, and also has shown an ability to inhibit tumor necrosis factor-alpha. After finishing up chemistry, manufacturing and controls procedures this year, Protemix expects to move the program into clinical testing.

Once its lead program has finished up Phase II, the company of 35 employees plans to evaluate funding options for further development and potential commercialization, Pool said. "We'll decide then how the company might move forward." Options could include partnering or building its own sales force.

Novartis Venture Fund, the VC arm of Basel, Switzerland-based Novartis AG, and NovaQuest, the strategic partnering group of Research Triangle Park, N.C.-based Quintiles Transnational Corp., led the first part of Protemix's Series A round, along with the company's previous investor group, led by Birnie Capital Ltd.

Reinhard Ambros, of the Novartis Venture Fund, joined the company's board.