Nearly two years since conducting its last financing round, viral disease company Sequoia Pharmaceuticals Inc. pulled in $35 million in a Series C that will advance its two lead candidates.
The Gaithersburg, Md.-based company last raised $22 million in a Series B round in March 2005. The latest round will help Sequoia, founded in 2002, to move its first two products into the clinic: an HIV protease inhibitor and a pharmacokinetic enhancer (PKE).
"We expect this to allow us to complete Phase IIa proof-of-concept studies on both of these molecules and to continue our research and development activities," said Gary Altman, the company's chief operating officer.
London-based The Wellcome Trust led the financing, which included participation from existing investors Health Care Ventures, of Cambridge, Mass.; Sofinnova Partners, of Paris; and Aberdare Ventures, of San Francisco. New investor MedImmune Ventures Inc. also joined in, resulting in the appointment of Wayne Hockmeyer to Sequoia's board. Hockmeyer is the president of MedImmune Ventures and chairman of the board, as well as former CEO and founder of MedImmune Inc., also of Gaithersburg. In addition to Hockmeyer, Julie Eskay-Eagle of Wellcome Trust joined the board.
Sequoia expects to use proceeds from the Series C to fund two clinical trials slated to begin this year.
An investigational new drug application for the company's HIV protease inhibitor is expected to be filed with the FDA in the first quarter, and an IND filing for PKE is set for the third quarter.
The HIV protease worldwide market currently is about $3 billion a year, with each of the two lead drugs bringing in about $1 billion. Sequoia believes its candidate will be competitive and can achieve the same success. It is being developed to treat both the wild-type and drug-resistant HIV/AIDS.
"We have indications that it is a very potent inhibitor of multiple drug-resistant mutations in viruses taken from patients refractory to existing treatments," Altman told BioWorld Today.
The candidate also may not require boosting, but even if it does, Sequoia intends to use PKE with it. The booster has no antiviral properties, "an important distinction" from other products, Altman said. Not only does it have potential in the field of infectious diseases, he said, but "it has the potential of enhancing and decreasing the pill burden for many other disease indications." He added that it can minimize variability among patients as to how drugs are metabolized.
Instead of taking a pill every hour or every six hours, PKE may enable patients to be dosed every 12 or every 18 hours.
"We think the market is in excess of $500 million a year" worldwide, Altman said.
Sequoia intends, at this point, to take its products through clinical development, but may re-evaluate that intention depending on partnering opportunities that arise. The company also is working at the discovery level on a therapeutic for hepatitis C virus-induced hepatitis.
In other financings news:
• Resverlogix Corp., of Calgary, Alberta, sold about $17 million of senior secured convertible promissory notes due Jan. 4, 2010, and accompanying warrants to buy about 408,647 common shares of Resverlogix. The notes initially have an 8 percent interest rate payable semi-annually in arrears and are convertible into about 1.63 million common shares at a conversion price of C$12.07 per share. The warrants have an exercise price of C$15.09 per share. Oppenheimer & Co. Inc. acted as placement agent, and Caris & Co. acted as co-agent for the offering. Resverlogix is developing therapies for cardiovascular disease.
• Semafore Pharmaceuticals Inc., of Indianapolis, completed a $9.5 million Series B financing that will be used to advance the company's clinical program for SF1126, its lead PI3 kinase inhibitor to treat cancer. Funds also will help further develop Semafore's pipeline of agents targeting the PI3K and PTEN pathway and will cover general corporate purposes. Both existing and new investors participated in the Series B financing. In addition, Semafore was awarded almost $4 million in peer-reviewed grants during the past year from Indiana's 21st Century Research and Technology Fund, the Cancer Treatment Research Foundation and the Multiple Myeloma Research Foundation.
• Sosei Group Corp., of Tokyo, said it intends to raise new funds by issuing stock acquisition rights and by concluding a third-party allotment agreement with Merrill Lynch Japan Securities Co. Ltd. Based on the initial exercise price of Yen 217,000 and the exercise of all SARs, Sosei expects to raise about Yen 3.9 billion. Sosei has six products in development, including AD 923, an optimized, sublingual formulation of fentanyl for use in cancer breakthrough pain. The product is expected to enter Phase III trials in the U.S. and Europe this year.