West Coast Editor

Morphotek Inc. topped 2004's Series C financing with a Series D round of $40 million last week, and plans to use the cash to advance the Phase II antibodies MORAb-003 and MORAb-009, as well as the preclinical pipeline.

Available cash will take the firm "well into 2009," said Nicholas Nicolaides, president, CEO and co-founder of Exton, Pa.-based Morphotek. By then, full Phase II data should be available for the two most advanced antibodies, with the lead compound in a Phase III pivotal trial, he said.

MORAb-003, in Phase II trials for platinum-sensitive ovarian cancer, won orphan drug status from the FDA in June. The compound targets cell-surface glycoprotein tumor cells bearing a molecule that is present on more than 90 percent of all ovarian tumors and others. Nicolaides expects the Phase II, multiple-endpoint trial to finish by the second half of 2008.

"If we start to see hints of activity in one of the arms, we may be able to accelerate the Phase II program and finish that sometime in the beginning of 2008," he told BioWorld Today.

Part of the trial measures the drug's efficacy by biomarker only: the protein CA 125. "There are really not many drugs being developed to try to suppress the progression of patients diagnosed with relapsed disease, without any clinical symptoms," Nicolaides said.

The CA 125 blood test has long been used to detect ovarian cancer - often called "the cancer that whispers," because it provides only subtle signals in mild, garden-variety symptoms that patients might disregard.

Researchers at Johns Hopkins, Fox Chase Cancer Center and the National Cancer Institute are testing Morphotek's second clinical-stage drug, MORAb-009, against pancreatic, non-small cell lung and ovarian cancers, as well as mesothelioma (a rare form of cancer usually associated with exposure to asbestos).

The compounds are fruits of Morphodoma, the firm's streamlined way to make fully human monoclonal antibodies out of high-titer human hybridomas, created by immunizing human B cells in vitro with either whole-tissue specimens and/or disease-associated antigens.

The method, also to be marketed by Morphotek as a collaborative tool, gets around glycosylation-related problems, while keeping a good safety profile and allowing for less frequent dosing, thanks to the longer half-life in serum.

Even better, Morphodoma-made antibodies don't bring the third-party deals and onerous royalty stacks associated with other discovery approaches such as humanization, transgenic and phage platforms.

"When groups partner with us, the only license they need is a Morphotek license," Nicolaides said.

Among the firm's corporate allies is a familiar antibody name: Abgenix Inc., of Fremont, Calif., for whom Morphotek helped in the development of an antibody-producing cell line.

"That was one of our earlier deals," Nicolaides said. Others for which Morphotek has done work include Baxter Healthcare Corp., of Deerfield, Ill.; Centocor Inc., of Malvern, Pa.; Novo Nordisk A/S, of Bagsvaerd, Denmark; and Wyeth, of Madison, N.J.

Founded in 2000, Morphotek has not signed partnerships for either its drugs or the human antibody technology platform, other than funding and alliances from the Department of Defense.

"That has been mostly by design, while we were trying to get validation for these leads," Nicolaides said, but the situation is about to change. Although a product collaboration would require "some significant funding" from a partner, he said, Phase II is the "ideal" stage to start discussions.

Some big pharma firms feel the same way, but not all. "Some companies want to see more clinical validation, and are happy to pay more [later]," Nicolaides said. In any case, the antibody platform technology will give the 45-employee firm "a steady stream of revenues over the next couple of years," he said.

Morphotek's Series C raised $26 million in February 2004. Rodney Dausch, the firm's chief financial officer, noted that the latest financing took place in "a pretty tough market. We were competing with a lot of public companies doing PIPEs." (See BioWorld Today, Feb. 19, 2004.)

Investor Growth Capital in New York led the Series D. MDS Capital and Hunt BioVentures signed up as new investors. Existing backers also took part in the round, including Forward Ventures, Morgenthaler Ventures, SR One, Flagship Ventures, Burrill & Co., CB Health Ventures and Rock Maple Ventures.

In other financing news:

• Pharmacopeia Drug Discovery Inc., of Princeton, N.J., is raising about $23.1 million in net proceeds through a stock and warrant sale, to be used for general corporate purposes. The firm sold about 5.8 million common shares at $4.28 apiece to certain institutional investors, who also bought five-year warrants for about 1.5 million more shares, exercisable at $5.14. The offering is expected to close Wednesday, subject to the satisfaction of customary conditions. CIBC World Markets acted as the lead underwriter, with Merriman Curhan Ford & Co. as co-manager. Pharmacopeia's stock (NASDAQ:PCOP) closed Friday at $4.45, up 17 cents.

• Trubion Pharmaceuticals Inc., of Seattle, registered with the SEC to sell 4 million shares in an initial public offering at a price range between $13 and $15. The biopharmaceutical company estimated that net proceeds could total $49.9 million in the deal, based on a per-share price of $14, to which it would add $11.2 million more from the sale of 800,000 shares at that assumed price in a concurrent private placement with Wyeth, its partner on its lead program and other work. Proceeds from that deal, as well as the IPO money and existing capital would allow Trubion to complete its ongoing clinical trials and maintain its currently planned operations for the next two years. At the forefront of those plans are completing a Phase IIb trial of its lead product, TRU-015, that got under way last month to test a larger dose range of the CD20-directed compound in rheumatoid arthritis patients. Trubion applied to have its stock listed on the Nasdaq Global Market as "TRBN." (See BioWorld Today, June 8, 2006.)