Washington Editor

Xanthus Pharmaceuticals Inc. restocked its bank account with $25 million, by way of a sale of additional Series B convertible preferred shares to a syndicate of existing investors.

The Cambridge, Mass.-based company's "tremendous progress" in the last year presented an attractive opportunity to those backers, CEO Richard Dean told BioWorld Today, pointing to clinical and business milestones achieved in that period. Going forward in the next year, the new funds position Xanthus to develop its pipeline of five clinical-stage oncology products.

The portfolio includes two "potential near-to-market opportunities," Dean said: Xanafide (amonafide malate), a small molecule that has shown "encouraging" Phase II results for secondary acute myeloid leukemia, and oral fludarabine (Fludara), a recently in-licensed purine nucleoside analogue for chronic lymphocytic leukemia. For both drugs, the company plans to soon meet with the FDA to set guidance on paths for approval.

Xanafide's Phase II study is nearly complete, after which Xanthus would seek clarification from the agency on clearance requirements. That might mean another study concurrent with a filing or further clinical work ahead of a submission. Dean said the company expects to sit down with the FDA by the end of next quarter.

"One way or another," he said, "we do believe we'll get clarification on what the exact requirements are for the regulatory path."

Oral fludarabine, which was recently in-licensed from Schering AG, is approved throughout the world except in the U.S., although an intravenous formulation is. Dean indicated that the oral dosage is preferred where both are available, and U.S. physicians also would like the option, but said Xanthus is not yet certain about FDA requirements. Those question marks will be sorted out in a meeting with the agency, probably toward the middle of next year.

For both drugs, the planned FDA sit-downs "will give us a clear-cut timeline" to their approvals, Dean said. The latest funding, he added, would permit the company to perform at least one additional study on one of the products, if need be.

Looking further down the road, Xanthus' commercialization plans contemplate managing the drugs' sales internally through a contract sales group, given that the hematological space "is a relatively small universe," Dean said, "especially for the treatment of acute leukemias." But he added that the company would consider working in concert with a partner, if appropriate.

In terms of the rest of its pipeline, Xanthus has another small molecule in Phase II, Symadex (imidazoacridinone), for breast and colorectal cancer. Already, 40 percent of patients have exhibited stable disease for extended periods of time and one has converted to a partial response. Final data are due in the first half of next year.

Perhaps more exciting to the company are "very attractive" preclinical data on Symadex autoimmune diseases, multiple sclerosis and rheumatoid arthritis. A chronic toxicology study is being planned for the drug, which exhibits no immunosuppressive side effects, followed by an investigational new drug application to take it into the clinic in that area. This testing is tabbed for next year.

A likely partnering candidate, with interest already coming in, Dean said, it also has shown preclinical efficacy in hematological malignancies.

Rounding out Xanthus' portfolio are P2045, a small peptide for metastatic lung cancer, and Clomet (4-demethylpenclomedine), a small molecule for solid tumors. The former, also recently in-licensed from Berlin-based Schering, is in Phase I for both non-small-cell and small-cell lung cancers, and the company plans to begin Phase I studies next year for Clomet.

"If you take a snapshot of us next year," Dean said, "we're going to have five different molecules in the clinic in oncology."

Xanthus picked up exclusive U.S. rights to oral fludarabine in exchange for up-front and milestone payments of undisclosed amounts and royalties further down the road. Its deal for P2045 provides exclusive worldwide rights, also in exchange for undisclosed up-front and milestone payments followed by royalties.

To date, the company has raised $88 million in total venture capital, and the latest funding will extend into early 2008. Its existing investors were the sole participants in this round, a group that includes Oxford Bioscience Partners, of Boston; HealthCare Ventures, of Cambridge, Mass.; GeneChem, of Montreal; GIMV, of Antwerp, Belgium; Hambrecht & Quist Capital Management, of San Francisco; Still River Funds, of Waltham, Mass.; Neomed, of Oslo, Norway; Kestrel Ventures, of Boston; CDP Capital, of Montreal; CDIB BioScience Ventures, of Taipei, Taiwan; and Yasuda, of Beijing.

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