Nereus Pharmaceuticals Inc. pulled in $18.3 million with the closing of the second tranche of its Series D round, as it prepares to enter the clinic with its lead oncology compounds.
The financing was led by HBM BioVentures (Cayman) Ltd., of the Cayman Islands, and HBM BioCapital, of Zurich, Switzerland. Altogether, Nereus’ fourth capital round, including the first tranche of $24.3 million that closed in December 2004, brought in $42.6 million. To date, the company has raised $80.6 million. (See BioWorld Today, Jan. 5, 2005.)
Closing of the second tranche was triggered by the achievement of certain company milestones, including the completion of investigational new drug applications for its two lead cancer drug candidates, NPI-2358 and NPI-0052. Nereus hopes to start Phase I testing shortly.
"We’re looking at the first half of this year for starting both," said Kobi Sethna, president and CEO of the San Diego-based firm.
The first compound, NPI-2358, is a selective tumor vascular disrupting agent (VDA) for the treatment of solid tumors. Though it is derived from a marine fungus, the compound is made synthetically and aims at starving the tumor by disrupting the flow of blood to tumor cells.
"We think compounds like this could have a significant role, based on the success of anti-angiogenics like Avastin," Sethna said, referring to the anti-VEGF drug marketed by South San Francisco-based Genentech Inc.
Avastin (bevacizumab) has been approved for treating metastatic colon cancer and is awaiting FDA action as a second-line treatment in colorectal cancer.
Clinical testing with NPI-2358 will begin in solid tumors. Depending on the results of those studies, Nereus might consider investigating the drug in combination with other cancer treatments, such as other VDAs, anti-angiogenics or with chemotherapy or radiation.
In addition to blocking blood flow to tumors, "there is indication from preclinical studies that [NPI-2358] may have some intrinsic cytotoxic activity on its own," Sethna told BioWorld Today. "Of course, we have to confirm that in human trials."
NPI-0052 is a proteasome inhibitor derived from a marine-obligate actinomycete aimed at treating patients with multiple myeloma, solid tumors and lymphomas. The drug falls in the same class as Cambridge, Mass.-based Millennium Pharmaceuticals Inc.’s Velcade (bortezomib), but is "slightly different in the way it acts," Sethna said. "We hope to demonstrate [its efficacy] in clinical trials."
The financing is expected to fund clinical work for both compounds through Phase I. After that, "it’s an open question," he said. "We’ll likely be looking at other mechanisms to continue to fund our work, either from partnerships or different financing sources."
Behind the lead products is a portfolio of compounds, including a class of selective NFkB modulators that has shown early activity in cancer and inflammation.
All of Nereus’ compounds are derived from the company’s in-house drug discovery platform. "This has proved to be a very prolific source for us," Sethna said. "We have two lead clinical compounds, backup compounds and others in the pipeline that could be developed if we so desire."
With the potential for its platform to yield a large number of therapeutics, Nereus eventually might look at partnering the marine microbial-based engine with other companies to use in therapeutic areas outside of cancer. Those types of arrangements "are probably going to be inevitable, because we do have a very productive source here," he said.
The company, which has 34 employees, licensed the marine technology in 2000.
Other venture capital firms participating in Nereus’ Series D are Alta Partners, of San Francisco; Forward Ventures, of San Diego; Pacific Venture Group, of Irvine, Calif.; Novartis BioVenture Fund, of San Diego; Genavent Partners, an equity firm of Paris-based Sanofi-Aventis Group; Lotus BioScience Ventures, of Hong Kong; FirstBio, of Taipei, Taiwan; InterWest Partners, of Menlo Park, Calif.; Red Abbey Venture Partners, of Baltimore; Advent International, of Boston; and GIMV, of Antwerp, Belgium.
In other financing news:
• Antares Pharma Inc., of Exton, Pa., completed its previously announced financing of nearly $11 million through a private placement of units consisting of 8.8 million shares of stock priced at $1.25 each, plus warrants to purchase 6.6 million shares at an exercise price of $1.50 per share. Proceeds from the financing are expected to be used for general corporate purposes, which might include increasing the company’s working capital, acquisitions, in-licensing of products or technologies, and capital expenditures. Shares of Antares (AMEX:AIS) closed at $1.36 Monday, unchanged.
• MedMira Inc., of Halifax, Nova Scotia, secured C$6.5 million (US$5.7 million) in equity financing from the Morningside group, an international firm based in Hong Kong. The financing is expected to enable MedMira to capitalize on key markets, such as over-the-counter tests for HIV, as well as leverage its rapid co-infection line of tests, and bring the Maple Biosciences technology to market. Under the terms, Morningside will acquire 10.8 million equity units priced at C60 cents each, with each unit consisting of one common share and one-half of a common share purchase warrant. A full warrant entitles Morningside to purchase one share at C69 cents over a two-year period. Following the transaction, Morningside will become a 19 percent shareholder of MedMira. Shares (CDNX:MIR) gained C1 cent Monday to close at C63 cents.
• SGX Pharmaceuticals Inc., of San Diego, said underwriters exercised an overallotment option to purchase an additional 152,904 shares of its common stock in connection with its initial public offering priced late last month. With the overallotment, the offering will total about 4.15 million shares at $6 each, resulting in expected net proceeds of about $23.2 million. Proceeds will be used to support research and development activities, including the completion of a pivotal trial for cancer drug Troxatyl. Shares of SGX (NASDAQ:SGXP) closed at $7.66 Monday, down 7 cents. (See BioWorld Today, Feb. 2, 2006.)
• ViRexx Medical Corp., of Edmonton, Alberta, expects gross proceeds of up to C$2 million (US$1.75 million) from a non-brokered private placement of up to about 1.7 million units of the company priced at C$1.20. Each unit consists of one common share, as well as one common share purchase warrant entitling the holder to purchase one common share of ViRexx at C$1.75 for a period of 24 months from the closing data, expected on or around April 18. Proceeds will go toward working capital, product development and general corporate purposes. ViRexx’s stock (AMEX:REX) lost 3 cents Monday to close at $1.20.