Neurodegenerative drug development firm Accera Inc. raised $7.5 million in its Series B round to fund ongoing Phase II trials of its lead product, AC-1202, in Alzheimer's disease and age-associated memory impairment (AAMI).

The financing was led by Inventages Venture Capital SA, of Geneva, and included participation from San Diego-based Posco BioVentures and several private investors. Inventages and Posco both invested in Accera's $6 million Series A round in 2004.

Funds will be used to support ongoing clinical work, including the completion of a Phase IIb trial of AC-1202 in mild to moderate Alzheimer's disease, which is expected to yield results by year's end, said Steve Orndorff, president and CEO of the Broomfield, Colo.-based company.

"We'll also be able to finance our Phase IIa [trial] in AAMI and fund some early screening and discovery work" on the company's small-molecule libraries, he added.

Since its founding in May 2001, privately held Accera has focused much of its efforts on AC-1202, a prodrug aimed at the metabolic defect that causes the amyloid beta protein to accumulate in the brain of Alzheimer's patients.

It's a "defect in the mitochondria of neuronal cells in the brain," Orndorff said. "Studies have shown that this defect correlates with the diagnosis of Alzheimer's and the progression of the disease."

The active form of AC-1202 is designed to be taken up by neuronal cells, "where it feeds directly into certain pathways," he told BioWorld Today.

The drug aims at provoking a "cascade effect on several different things," Orndorff said, including the synthesis of acetylcholine, a reduction in oxidative stress and a boost in cholesterol synthesis in the brain, which are "really key in maintaining the integrity and viability of the neuronal cells in neurodegenerative diseases."

In addition to Alzheimer's, Accera believes AC-1202 could treat AAMI effectively, a decline in cognition that's not related to any particular disease state but affects up to 50 percent of people older than 65.

The company initiated a Phase II trial in AAMI last month, and finished enrolling 150 patients in the "record time" of less than four weeks, Orndorff said.

Accera also is completing preclinical work on AC-1202 in Parkinson's disease.

Most of the company's research and clinical work is contracted out, and Accera operates as a virtual firm, with a staff of 10. Orndorff said the goal is to get products through Phase II proof-of-principle trials before out-licensing or partnering with larger firms for late-stage development and commercialization.

Accera should be able to fund operations through the end of next year with its Series B round, though it's likely the company will seek to raise some additional funds in the first quarter of 2007 "just to be prudent," Orndorff said.

Along with the financing, Wolfgang Reichenberger, of IVC Americas SA, joined Accera's board.