Contributing Writer

Ophthalmology play Neurotech Pharmaceuticals Inc. raised $35 million in a Series B financing led by Burrill & Co. and will use the funds to drive Phase II trials with NT-501, an intraocular, polymer implant containing human retinal pigment epithelial cells genetically modified to secrete ciliary neurotrophic factor (CNTF).

The Lincoln, R.I.-based company started a Phase II trial in dry age-related macular degeneration earlier this year, and president and CEO Ted Danse said the trial will be expanded from a single site to seven sites. Two additional Phase II trials in early and late-stage retinitis pigmentosa are beginning "as we speak," Danse said, and should enroll the first patients before the end of the year.

All three trials are being conducted in the U.S. and are expected to generate data by the end of 2008.

The market for wet age-related macular degeneration drugs is heating up, as evidenced by Genentech Inc.'s launch of Lucentis (ranibizumab) earlier this year, which pulled in $153 million in the third quarter. Yet there are no approved treatments for dry age-related macular degeneration, which is estimated to be a larger market. Genentech stepped into the field earlier this week with its proposed takeover of Tanox Inc., which has the preclinical compound TNX-234. (See BioWorld Today, Nov. 13, 2006).

There are also no treatments that can reverse retinitis pigmentosa, although vitamin A has shown some use in slowing disease progression.

"We're still in the early days of retinal therapeutics," said Bryant Fong, principal with Burrill & Co. and newly appointed board member of Neurotech. Fong pointed out that the historic hurdle with those types of drugs has been their delivery to the back of the eye, which often is accomplished through injections every four to six weeks.

Neurotech's NT-501 is an implant that delivers a low dose of CNTF over six months. In a Phase I trial in visually impaired patients with retinitis pigmentosa, the drug was safe and well-tolerated and resulted in an improvement in visual acuity for three of the seven patients involved in the trial.

"These patients were almost legally blind, and they saw vision improvement, which was completely unexpected in a Phase I trial designed just to look at safety," Fong said.

In addition to pushing forward with the Phase II trials of NT-501, Danse said the company plans to pursue additional retinal diseases to be announced in the first half of 2007. The funding is anticipated to last until 2009.

Fong said the round came together "very quickly," and included strong participation from Versant Ventures and SV Life Sciences, both of whom are seasoned investors in the ophthalmologic space. Other new investors included Omega Fund, Nexus Medical Partners and Pound Capital, who were joined by existing investors Apax Partners France, Merlin Biosciences, Atlas Venture, Mayflower, Avida Group and Alpha Associates.

Following the Series B round, Burrill & Co., Versant Ventures, SV Life Sciences, Apax Partners France and Merlin Biosciences are Neurotech's largest shareholders. The company raised a $25.6 million Series A round in November 2003, and previously had raised additional money predominantly from European investors. Neurotech originally was located in Paris, but relocated to the U.S. in June 2006.

In other financing news:

• Dendreon Corp., of Seattle, is planning a registered direct offering of about 9.9 million shares for gross proceeds of $45 million. The proceeds imply a price of about $4.55 per share, a discount to Dendreon's (NASDAQ:DNDN) Wednesday closing price of $5.35 per share. Credit Suisse Securities (USA) LLC and Lazard Capital Markets LLC served as joint lead placement agents for the offering, which is expected to close Nov. 21. Earlier this week, Dendreon submitted the final portion of its rolling biologics license application for Provenge (sipuleucel-T) in the treatment of asymptomatic, metastatic, androgen-independent prostate cancer and asked for a priority review with FDA action within six months.

• AnaMar Medical AB, of Göteborg, Sweden, received a commitment from its largest shareholder, Koncentra Holding AB, for new shares worth SEK50 million (US$7 million). LinkMed AB, the company's second-largest shareholder, has the option to subscribe for SEK7.5 million worth of the shares. The company is in the process of licensing out its lead drug candidate, AMAP102, an oral melanocortin receptor (MCR) agonist for the treatment of inflammation and rheumatoid arthritis.

• Alexion Pharmaceuticals Inc., of Cheshire, Conn., priced its previously announced offering of 3 million shares at $43 per share, generating estimated gross proceeds of $129 million. Underwriters will receive a 30-day option to buy up to an additional 450,000 shares. Goldman, Sachs & Co. and Morgan Stanley & Co. Inc. are acting as joint book-running managers, while Bear, Stearns & Co. Inc., Cowen and Co. LLC, Credit Suisse and Piper Jaffray & Co. are serving as co-managers.

• CollaGenex Pharmaceuticals Inc., of Newtown, Pa., plans to sell 3.5 million shares at $13 per share, a 2 percent discount to the stock's (NASDAQ:CGPI) closing price Wednesday of $13.31. The offering will bring in $45.5 million, which specialty pharmaceutical company CollaGenex anticipates will translate to $42.6 million after fees and expenses. Lazard Capital Markets LLC is the sole placement agent and Leerink Swann & Co. is the financial adviser.

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