West Coast Editor

CoGenesys Inc., created last year as a division of Human Genome Sciences Inc., raised $55 million in a Series A to become a free-standing company with plans to advance compounds born of HGS' albumin-fusion technology, monoclonal antibodies and more.

"This is several years of financing for us," Steven Mayer, CEO of CoGenesys, told BioWorld Today, though estimating the runway to the next fund raising is difficult because the firm, while developing drugs, expects to bring in revenue from preclinical out-licensing and from helping other companies use the albumin-fusion approach with their own molecules.

Rockville, Md.-based CoGenesys was formed to carry out early development of gene-based products and pursue work with some of HGS' intellectual property and technology assets, while HGS focuses on later-stage compounds. (See BioWorld Today, Dec. 15, 2005.)

Craig Rosen, CoGenesys' chairman and chief scientific officer, said the company plans to file its first investigational new drug application "shortly" for heart failure.

"We're planning on a second IND, as well, this year, but we haven't disclosed the therapeutic area," he added.

CoGenesys lists about 70 employees, including the team that developed the albumin-fusion technology, which joins the albumin gene to the gene that expresses the drug protein to extend half-life. Its 48,000-sq.-ft. facility houses specialized laboratories and brings enough cGMP manufacturing capacity for early stage clinical tests - the kind of plant that would "take [an ordinary start-up] three to five years to put together," Mayer noted.

Word of the CoGenesys financing follows a strong vote last week for the albumin approach from Basel, Switzerland-based Novartis AG, which entered a potential $550 million agreement - $45 million up front - with HGS for the near-Phase III compound Albuferon (albumin-interferon alpha 2b) for chronic hepatitis C. The worldwide license deal covers all potential uses. (See BioWorld Today, June 7, 2006.)

In fall 2004, HGS' Albugon (albumin-glucagon-like peptide-1) drew a deal worth up to $183 million with London-based GlaxoSmithKline plc, which took worldwide rights to the drug for Type II diabetics. (See BioWorld Today, Oct. 27, 2004.)

"This is the group that did the early work [on the Novartis and the GSK compound]," said Mayer, HGS' former chief financial officer. "We have all the people, the assays and all the capabilities."

How much of CoGenesys' work will focus on albumin linkage will be determined molecule by molecule, Mayer said.

"I would not want to put a percentage on it," he said, though albumin fusion "clearly will be an important part" of the model, which involves pushing compounds quickly into Phase I and Phase II trials, and then out-licensing or finding partners to advance them into later stages.

"We really want to be a pipeline for big pharma and big biotech," Mayer said.

Rosen told BioWorld Today that CoGenesys will work on "those types of [indications] where there are a lot of surrogates known, so you would see results in early clinical trials." He cited diabetes as one example and enzyme shortage as another.

"We can immediately find out whether the molecule is active when we link it up with albumin, and does it have a longer half-life in the animal model," he said. "Not only can we express enzymes in higher quantities, but we can have a longer-lasting enzyme" - lending itself to potential subcutaneous rather than intravenous administration.

Rosen, who previously served as HGS' president and chief scientific officer, said the clinical fast track means CoGenesys has "four or five programs competing against each other," and a diabetes compound is likely to become the subject of the company's third IND.

At the start of the year, CoGenesys and HGS gave PDL BioPharma Inc. certain exclusive worldwide rights to intellectual property for an undisclosed target antigen discovered by HGS. In exchange, CoGenesys got an up-front licensing fee, development milestone payments and royalties on future sales of antibody therapeutics developed by PDL against the target. Fremont, Calif.-based PDL is providing CoGenesys access to its antibody humanization technology platform. (See BioWorld Today, Jan. 11, 2006.)

"I think we'll be doing quite a bit of that [type of deal]," Mayer said.

The Series A financing was led by the venture-capital firm New Enterprise Associates, with investments by OrbiMed Advisors, of New York, and Red Abbey Venture Partners, of Baltimore, as well as a "significant equity participation" by HGS, CoGenesys said.

Joining CoGenesys' board as part of the financing are James Barrett and Chuck Newhall, general partners of NEA, and Michael Sheffery, founding general partner and co-head of private equity at OrbiMed.