BioWorld International Correspondent

Affectis Pharmaceuticals AG raised €12 million (US$15.1 million) in a Series C round to fund ongoing development of a proprietary drug discovery program in depression, and to in-license a clinical-stage drug candidate for the same indication.

The company, which was spun off from the Munich, Germany-based Max Planck Institute of Psychiatry in 2003, is attempting to establish modulation of a novel target, P2X7, as a new therapeutic principle in depression.

Associations between the gene and depression were identified in a French-Canadian population and in a separate study of 1,000 German Caucasian patients suffering from recurrent depression.

"It is a calcium channel. It is mainly found in the hippocampus," Affectis CEO Herbert Stadler said.

The P2X7 gene product is thought to play a role in neuroprotection, in modulating inflammatory processes and in neurotransmission.

Other companies are developing antagonists to the same target for treatment of rheumatoid arthritis, Stadler said. "We are developing agonists."

Munich-based Affectis aims to select a candidate drug by early 2007 and to commence a Phase I clinical trial by late 2007 or early 2008. "We would like to take it up to a successful Phase IIa trial and then look for a partner to develop it further," Stadler said.

The company already identified several early stage leads. "We know that it works in animal models [of depression], and so far, that's the best validation we have of the concept," Stadler said.

Affectis has now raised more than €22 million in funding and has enough cash to support its operations until early 2009. By then, it aims to have completed a Phase IIa trial of the compound it is in the process of licensing in and a Phase I trial of a P2X7 agonist.

The funding round was led by a new investor, Aescap Venture, of Amsterdam, the Netherlands. The company's previous investors also participated. Aescap co-founder and general partner, Dinko Valerio, a former CEO of Leiden-based Crucell NV, has joined the Affectis board.

Affectis also named Michael Bös as its new vice president of research and development. He previously was director of chemistry at the Canadian arm of Ingelheim, Germany-based Boehringer Ingelheim GmbH.

In other financial news:

• Aradigm Corp., of Hayward, Calif., filed a preliminary registration statement for a proposed public offering of up to 23 million shares of common stock. Proceeds would be used to support preclinical and clinical testing of ARD-3100 for cystic fibrosis, as well as the completion of development of its next-generation AERx pulmonary drug delivery device and general corporate purposes. Shares of Aradigm (NASDAQ:ARDM) lost 12 cents Tuesday to close at $1.31.

• CMP Therapeutics Ltd., of Oxford, UK, closed a Series A financing round provided by Inventages Capital Investments Inc., which invested €1 million (US$1.3 million) in the first tranche in December 2005, and recently added a further €1 million following the company's achievement of a key milestone, for a total investment of €4.5 million. CMP is developing a nasal spray using a preparation of chitin microparticles, a naturally occurring polysaccharide derived from shrimp cells for allergies and hay fever.

• Idera Pharmaceuticals Inc., of Cambridge, Mass., is drawing down $4 million through the sale of 781,250 shares of its common stock priced at $5.12 each, under the terms of a $9.75 million equity financing vehicle it entered in March with Biotech Shares Ltd. The company plans to use the proceeds to advance its pipeline of drug candidates targeted to Toll-like receptors, including IMO-2055, which is in Phase II trials in oncology and a Phase I/II chemotherapy combination trial in oncology. Idera also has IMO-2125 in preclinical testing for infectious diseases, as well as discovery-stage programs with agonists of TLR7 and TLR8 and antagonists to TLR9. The company has the right to draw down an additional $2.25 million from Biotech Shares through the end of 2006.

• ProNAi Therapeutics Inc., of Kalamazoo, Mich., closed a bridge funding round, securing $6.7 million in additional financing that included investments from Apjohn Ventures, Grand Angels, Amherst Fund, Sigvion Ventures and a previously announced $3.3 million investment from the Michigan Economic Development Corp. Since its 2004 founding, ProNAi has raised $11 million. Proceeds from the latest financing will help advance the company's lead candidate, PNT-100, toward the clinic, with an investigational new drug application expected in mid-2007.