Washington Editor

Operations at Allostera Pharma Inc. are up and running as the start-up closed its seed financing efforts, netting a total of more than C$2.1 million (US$1.9 million).

The Montreal-based company, which was founded just months ago, has earmarked the early funds to work on its allosteric antagonists to growth factor and cytokine receptors - specifically to continue preclinical work on a number of already discovered compounds. Its lead products, which target the insulin-like growth factor-1 receptor (IGF-1R) for cancer, comprise a small group of candidates, but Allostera expects to pick a lead and chase an investigational new drug application in 18 months.

President and CEO Maurice Piche said investors have been interested in the company's "very unique way" of developing small molecules, the Module X Technology, which "allows us in a very, very short period of time to validate compounds for key receptors." He said the platform has generated highly specific peptides with average positive hit rates ranging between 20 percent and 50 percent.

Allostera is especially keen on its lead peptides, initially being developed for hepatocarcinoma. The IGF-1R target is implicated in cellular proliferation, apoptosis, carcinogenesis, progression, metastasis and resistance to cytotoxic therapies.

Aimed at "a very specific pathway," Piche noted that the company's three IGF-1R-directed peptides do not lead to an increase in the amount of blood sugar. They have demonstrated potent biological profiles in a number of human cancer cell lines, and exhibited multiple mechanisms of action as anti-proliferative and anti-angiogenic agents in animal studies.

They could prove useful in breast and lung cancer in addition to liver cancer, though Allostera is first focusing on the latter because of the opportunity to work in an orphan drug space; surgery is the only current therapeutic option for liver cancer patients.

Earlier-stage compounds validated by the company are being developed to target IL-23, IL-1, IL-4, IL-13 and VEGF for other diseases, such as inflammatory and ocular conditions.

Co-founders include Christine Quiniou, its director of scientific affairs, and Sylvain Chemtob, its chief scientific officer who developed the Module X Technology in his lab at St. Justine Hospital in Montreal.

Down the road, Allostera is looking to raise an additional C$4 million in a Series A round to finance preclinical work to be done by a contract research organization.

The company, which is operating on a virtual basis now, eventually expects to secure C$3 million in Series B funds to advance its molecules into clinical development through Phase II before signing partnerships.

"We intend to have all available financial resources targeted toward the development of the technology," Piche said, "rather than for overhead."

The financing included investments from CQVB, the Centre Quebecois de Valorisation des Biotechnologies in Quebec City, and Valorisation HSJ LP, the investment arm of St. Justine Hospital acting through its general partner, Gestion Univalor LP.

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