BioWorld International Correspondent
LONDON - VASTox plc raised £10.45 million ($18.2 million) to accelerate development of its lead program in Duchenne muscular dystrophy (DMD), after demonstrating proof of principle in a novel method of tackling the untreatable inherited disease.
The company, which is quoted on the Alternative Investment Market in London, placed 5.9 million new shares at £1.77 per share, and also sold 1.5 million existing shares on behalf of some of the founding academics at the same price.
Steven Lee, CEO, told BioWorld International the company had really good support from investors. "We did consider taking less - maybe £5 million - to last 18 months. But the investor view was they wanted to invest more, and in the end, we had to cut a few people back."
The money raised will be devoted to DMD, providing the company with the means to take the lead compound into the clinic without compromising the other three programs in the portfolio.
DMD is a congenital disease, affecting only boys, in which the body is unable to produce sufficient levels of the muscle protein dystrophin. Patients rarely live beyond the age of 30, as their heart and diaphragm muscles eventually stop working.
Kay Davies, one of Oxford, UK-based VASTox’s academic founders discovered that up-regulation of another muscle protein, utrophin, can compensate for a lack of dystrophin. The company has generated several lead compounds through its chemical genomics discovery engine, and these have shown efficacy in a mouse model of the disease.
Lee said he expects to complete lead optimization by the end of this year and to enter the clinic before the end of 2007. The company will apply for orphan drug status for the product.
There has been interest from potential partners following the announcement of the mouse model results in January. "What does the best deals is having the fire power behind you. We are now in a position of strength where we can negotiate hard and at the same time be adding value to the product," Lee said.
VASTox’s discovery engine is based on a novel approach to genomics in which rather than throwing up new targets that are then subjected to high throughput screens, chemical libraries are probed in vivo, in zebra fish and fruit flies. That enables the company to identify drug targets and the molecules that modulate them simultaneously.
The high level of homology between zebrafish and humans means that the screens are effectively in vivo, and unlike using mice, it is possible to do high-throughput screening and to observe effects directly.
Drosophila are very useful for secondary screening because it is easy to generate transgenics, mutations and deletions.
The company has built up a services business currently worth £500,000 per annum, and the model is to use the profits from that side of the business to fund development of the in-house portfolio.
"We said to the investors, We won’t change any other part of the business,’" Lee said. "But raising this money does mean our other projects can go faster because we are freeing up money currently invested in DMD."