BioWorld International Correspondent

PARIS - Novagali Pharma closed a third funding round in which it raised €26 million from its existing investors and two newcomers, bringing to €44 million (US$54.6 million) the total funding it has raised since it was founded in August 2000.

In addition to the seven French venture capital funds that provided it with €14.2 million in the second financing it completed in 2004, Paris-based AGF Private Equity, the venture capital arm of the AGF insurance company, and Bernard Chauvin, who joined Novagali's supervisory board last December, participated.

Novagali's historical investors are all Paris-based venture capital funds: Auriga Ventures, CDC Entreprises Innovation, Crédit Agricole Private Equity, Edmond de Rothschild Investment Partners, FCJE (a public fund managed by CDC Entreprises-FP Gestion), Siparex Ventures, and 1.2.3. Multinova (a fund managed by 1.2.3.Venture).

Novagali Pharma, which is based at Genopole, France's national biotechnology science and business park in Evry, said it plans to use the funds to complete the development and prepare the regulatory filing of its treatment for dry eye syndrome, Cationorm, and continue the clinical development of two other ophthalmic drugs.

Novagali is developing novel delivery systems exclusively for drugs to treat dry eye, glaucoma, age-related macular degeneration and diabetic retinopathy. It has developed a proprietary technology platform called Novasorb, which is based on cationic emulsions and enables products that are not soluble in the emulsion to be circulated in the organism.

Novagali Pharma's president and CEO, Jér me Martinez, told BioWorld International that Cationorm had completed a Phase II/III trial and that the company would apply for regulatory approval this year and launch it on the market in 2007. He explained that it was classified as a medical device since it contains no active principle and was designed to treat mild dry eye conditions.

He added that Novagali would create its own sales force to market the drug in France and neighboring countries, partner with distributors in other European countries and contract out sales and distribution of the product to local distributors in the U.S. and Japan.

The second product in Novagali's pipeline is Nova22007, a cyclosporine A cationic emulsion that is undergoing Phase III trials. The drug is being developed for moderate to severe dry eye, and Martinez said the company hoped to complete the trial in 2007, file the product for regulatory approval in 2008 and launch it in 2009.

The third product in clinical development is Nova21027, which is being developed for glaucoma. Novagali plans to launch a Phase II trial of the product before the end of this year.

Novagali also intends to use the funding to further the development of its delivery system Eyeject, a novel technology for intra- and peri-ocular delivery of drugs destined for diseases of the back of the eye.

Meanwhile, the company is in negotiations with third parties for out-licensing its oral, self-micro-emulsifying formulation of Paclitaxel, which it developed for the treatment of taxane-sensitive tumors.

Since the company now is focusing exclusively on ophthalmology, the product no longer has a place in its in-house drug development portfolio. A successful Phase I trial of the drug was completed in September 2005.