BioWorld International Correspondent

LONDON - Hunter-Fleming Ltd. raised £15.5 million (US$27 million) in a second-round funding of which $15 million will be invested in a new joint venture, Trident Pharmaceuticals Inc., created to fast track development of HF1020, a compound for asthma and allergic conditions.

The remainder of the funding will be used to progress three compounds: HF0220 for mild to moderate Alzheimer's disease, HF0420 for neuronal repair and spinal cord injury and HF0299 for neuropathic pain.

"I'm very pleased with the round, which in effect gives us two bites of the cherry," Jim Murray, CEO, told BioWorld International. "We get £6.9 directly into Hunter-Fleming, and the rest of the funding goes to support our new joint venture."

Murray expects the round to pave the way for an initial public offering on the Alternative Investment Market in London in 12 to 18 month, when the Bristol-based company intends to raise another £15 million.

The in-house part of the investment was led by MTI Partners Ltd., with Advent International, ITX Corp., Omega Fund Management, Pharmabio Development and Finance South West Growth Fund. Trident Pharmaceuticals was funded by Advent and Omega alone.

Trident will be based in Boston and headed by Marios Fotiadis, venture partner at Advent as acting CEO, with Robin Brown, also of Advent, and former head of cell biology at GlaxoSmithKline plc, as chief scientific officer.

Murray said HF1020 was spun off into a separate company because of the level of interest in the compound.

"We had approaches from two major multinationals wanting to license, but it is very early stage, so we didn't think we could get the best value," he said. "This route is very imaginative and gives dedicated funding for one compound."

The money will enable HF1020, based on research at Bristol University Medical School, to be progressed to the end of Phase IIa within the next four years. Murray admitted it is a slightly unusual model to set up a company dedicated to developing one compound, but the move is justified by the distinctive nature of HF1020.

"Also, from our point of view, it is part of our extended portfolio, and because Omega and Advent has invested directly in Trident, we have split the risk. The potential return is far greater than we could get if we went alone, because it provides the opportunity to focus [on HF1020]."

By the time of an IPO, Murray expects to have completed a Phase IIa biomarker trial of HF2020, which will be used to test safety and to assess the appropriate dose for a further Phase IIa proof-of-efficacy trial. Within the same time frame, HF0420 and HF0299 will be ready to enter Phase II, and Hunter Fleming aims to have a partnering or licensing deal on one of those three compounds.

Since it was set up in 1999, Hunter-Fleming has raised £14 million. Its business model is to in-license compounds from university partners and develop them up to Phase III before out-licensing to pharmaceutical partners. It also applies its own ideas and research to extend the reach of its intellectual property. "In total, we have in-licensed six patent families, and we have built that up to 12, using various university contacts to grow and build our IP," Murray said.

Murray was the leader of the team at Shire Pharmaceuticals plc that developed tacrine, the first treatment for enhancing residual brain function in Alzheimer's disease and also was responsible for developing galantamine.