Privately held ARYx Therapeutics Inc. brought in $30.4 million in its Series E financing to move its lead products through Phase II development before seeking partners.
It is the Fremont, Calif.-based company's fifth round of venture financing since it was founded in 1998. The Series D added $55 million in June 2004. To date, ARYx has brought in about $120 million.
The company attributes its fund-raising success to the steady progress of its clinical drug candidates. "We're continuing to move our products through development, and they show promise," said David Nagler, vice president of corporate affairs at ARYx. "We're very pleased with [the latest round], because it gives us the opportunity to take our three lead programs through proof of concept."
Ascent Biomedical Ventures, of New York, led the financing, which also included existing investors Boston-based MPM Capital; London-based Nomura Phase4 Ventures; New York-based OrbiMed; New York-based Merlin BioMed; Tokyo-based Jafco Life Science Investments; London-based Scottish Widows Investment Partnership; Menlo Park, Calif.-based Montreux Equity Partners; and Hong Kong-based Novel Bioventures.
ARYx's drug discovery and development work revolve around its RetroMetabolic drug design aimed at making existing drugs safer by engineering them with alternate modes of metabolizing.
"We start with an identified therapeutic target and mechanism, and then design what we call an 'ideal metabolite' to couple to that therapeutic mechanism," Nagler said. "What we end up with is safer because it avoids the drug-drug interaction that plagues many products on the market today." It's not uncommon for patients taking several therapies at the same time to have difficulty metabolizing all the drugs, he added, since most drugs metabolize through a single enzyme in the liver, the cytochrome P450 enzyme.
Those drugs "end up having to compete for the ability of exit the system." ARYx's products are designed to metabolize other ways, thereby "reducing the safety risk associated with currently marketed drugs," he said.
The company's first product, ATI-7507, is a serotonin type 4 (5HT4) agonist in Phase II studies for gastroesophageal reflux disease and gastroparesis. While there are existing 5HT4 agonists available for treating those diseases, long-term use of the products have demonstrated cardiac side effects. ATI-7507 was engineered to preserve the efficacy of 5HT4 while reducing the cardiac liabilities. ARYx expects to have the first proof-of-concept data on ATI-7507 later this month.
In another Phase II program, the company is evaluating ATI-2042, an analogue of amiodarone, in atrial fibrillation. The goal is to determine whether ATI-2042 is an equally effective treatment compared to amiodarone, a product that has toxic effects and limited use due to accumulation of the drug with long-term use.
The company's third program, ATI-5923, is in Phase I development. That product is an oral anticoagulant intended to preserve the efficacy of warfarin with an improved safety profile.
Over the course of the year, ARYx expects to have data from several studies, though the company has not disclosed a timeline for finishing proof-of-concept development. Once that is done, "our plan is that for each of our products to enter into a commercial collaboration with a major pharmaceutical partner for worldwide commercialization," Nagler told BioWorld Today. Beyond its lead programs, the company is conducting both early and late-stage research on other potential drug candidates to treat diseases such as hypertension, asthma, pain and irritable bowel syndrome.
Genitope Adds $54M For MyVax
With its personalized immunotherapy, MyVax, continuing in a pivotal cancer trial, Genitope Corp. raised $54.4 million in a public offering, selling 6.4 million shares at $8.50 per share. Net proceeds from the offering are estimated at $50.8 million, or $58.4 million if underwriters exercise a 960,000-share overallotment option in full. New York-based WR Hambrecht & Co. and San Francisco-based RBC Capital Markets are acting as co-lead underwriters of the offering, with WR Hambrecht acting as sole book-running manager. Brean Murray; Carret & Co. LLC; and Punk, Ziegel & Co.; all of New York, are serving as co-managers.
According to its prospectus, Genitope intends to use the funds to support clinical trials and other expenses related to the potential commercialization of MyVax, a patient-specific immunotherapy designed to activate the immune system to identify and attack cancer cells. MyVax is in a Phase III study as a treatment for follicular B-cell non-Hodgkin's lymphoma (NHL).
Following an interim data analysis in July, the data safety monitoring board told the company the trial would have to continue, though Genitope had hoped to reach its endpoint of progression-free survival by then. That news caused the company's stock to fall nearly 28 percent, to close at $8.80. (See BioWorld Today, July 27, 2005.)
The next planned interim analysis is anticipated around the middle of the year. Upon successful completion of the trial, the company intends to file for regulatory approval.
In addition to B-cell NHL, Genitope plans to evaluate MyVax for the treatment of other cancers. A Phase II study in chronic lymphocytic leukemia is expected to begin this year.
Proceeds from the financing also will support work to develop a panel of monoclonal antibodies for treating NHL, both alone and in combination with MyVax, with the hopes to reduce or eliminate the need for chemotherapy for patients in early stages of the disease. Genitope expects to file an investigational new drug application late this year or in early 2007.
The Redwood City, Calif.-based company has not yet released its fourth-quarter earnings. For the third quarter, it posted a net loss of $8.5 million, or 30 cents per share. As of Sept. 30, the company had $93.2 million in cash.
Shares of Genitope (NASDAQ:GTOP) closed at $9.09 Tuesday, up 16 cents.
In other financing news:
Avanir Pharmaceuticals Inc., of San Diego, said that as of Feb. 3, a majority of the holders of the company's Class A warrants elected to exercise their option to purchase 601,454 shares of Avanir's common stock at a price of $7 a share, resulting in net proceeds to the company of about $4.2 million. The company expected that the remaining warrants in the series, representing 95,642 shares of common stock and an additional $669,000 in proceeds to the company, would be exercised prior to the redemption period, which ended on Feb. 7. The redemption period was triggered with the company's stock price trading above $14 a share for a specified period of time.