West Coast Editor
To back efforts against the avian flu and other threats, the venture capital firm Kleiner Perkins Caufield & Byers launched the $200 million Pandemic and Bio Defense Fund.
KPCB partner Brook Byers said the bird flu pandemic risk inspired the firm during last year’s strategic planning to find other, similar areas where "big needs and not much innovation" prevail.
"The more we got into it, the more it branched into a whole bunch of things," he said, adding that the fund will focus on four areas: surveillance and detection, diagnostics, vaccines and drugs such as antivirals.
"We hope we only have to do this once," he said.
KPCB, which is known for providing early money to the entrepreneurs behind such ventures as South San Francisco-based Genentech Inc. and Idec Pharmaceuticals Inc. (now Biogen Idec Inc., of Cambridge, Mass.), not to mention AOL, Amazon.com and Google.
The new fund’s first investment is in Birmingham, Ala.-based BioCryst Pharmaceuticals Inc., which has, among other compounds in its pipeline, the Phase I-ready peramivir, a neuraminidase inhibitor with fast-track designation from the FDA for flu.
BioCryst made news earlier this month with its potential $190 million deal with Mundipharma International Holdings Ltd., of Cambridge, UK, which licensed exclusive development and commercialization rights to the lead cancer drug candidate Fodosine in Europe, as well as Asia and Australia, including Japan, New Zealand, China and India. (See BioWorld Today, Feb. 3, 2006.)
As BioCryst awaits a special protocol assessment to start a Phase IIb trial with Fodosine (forodesine hydrochloride) in relapsed or refractory T-cell leukemia, Mundipharma will start investigating the compound in other leukemias and lymphomas.
Money from the KPCB fund will boost peramivir work, and Byers said the push for possible vaccines against the avian flu will be strong and broad, but "we’re not going to work on H5N1," a strain identified as threatening.
"Plenty of people are doing that," Byers said. "We’ll be looking for something that could work across strains and have broader coverage."
BioCryst, "this little company in Alabama," offered "some nice animal data on peramivir," he said, noting that KPCB’s Beth Seidenberg will join BioCryst’s board of directors.
"They were funding [peramivir], but they were looking for more funding from the government, and you never know when that’s going to come. We’re in a hurry. The pandemic could be beginning today, and we wouldn’t know it. Or it could be 10 years from now."
Byers said the pandemic fund, which involves the same investors as KPCB’s other VC funds, will provide cash for "10 or a dozen companies," mostly with later-stage compounds. "We’re looking at 30 companies already," he said.
The weapon against flu is "probably going to turn out to be combination therapy, like with HIV, and right now all we have is Tamiflu," Byers said.
Tamiflu (oseltamivir phosphate), from Foster City, Calif.-based Gilead Sciences Inc., is approved to treat uncomplicated influenza A and B in patients ages 1 and older, and also as a prophylactic in people 13 years or older who are at high risk during flu season. The product, marketed by Basel, Switzerland-based F. Hoffmann-La Roche Ltd., is being investigated for use in the event of an avian flu pandemic.
In other financing news:
• Adolor Corp., of Exton, Pa., priced a public offering of 5 million shares of its common stock at $25 per share, for net proceeds of about $117 million. Closing is expected Feb. 22, with New York-based Lehman Brothers Inc. acting as the sole book-running manager. Pacific Growth Equities LLC, of San Francisco, along with New York’s Banc of America Securities LLC and JP Morgan Securities Inc. served as co-managers. Adolor, which will use the money for general corporate purposes, has granted underwriters an option to buy up to 750,000 more shares within 30 days after the offering. Adolor’s stock (NASDAQ:ADLR) closed Thursday at $25.57, up 38 cents.
• ViRexx Medical Corp., of Edmonton, Alberta, closed a brokered private placement equity financing which will result in the issuance of about 10.9 million units at a price of C$1.10 (about US94 cents) per unit for gross proceeds to the company of C$12 million. Each unit consists of one common share and one common share purchase warrant, and each common share purchase warrant entitles the holder to purchase a share of ViRexx at $1.50 for a period of two years from the date of issuance. ViRexx’s shares (TSX:VIR) closed Thursday at C$1.40, down C3 cents.