Yeast-based immunotherapy company GlobeImmune Inc. raised $34.3 million in its second venture financing round to fund early efficacy trials of its two lead products in cancer and hepatitis C.

The Series B was "a pretty substantial round," said Tim Rodell, CEO of GlobeImmune. "All of our Series A investors participated, and the quality of our new investors is very encouraging."

To date, the company has raised about $42 million in venture financing, plus about $4 million from an angel round and federal grant money.

The recent funding is expected to carry the company for about two years, Rodell said. "The primary milestones for us are clinical efficacy data in at least two indications."

GlobeImmune plans to begin a Phase II trial of GI-4000 around the end of the year in patients with pancreatic cancer. In July, the company initiated a Phase Ib study of GI-5005 in chronic hepatitis C.

Both products were derived from GlobeImmune's Tarmogen-based platform. Tarmogens are described as whole recombinant yeast - specifically Saccharomyces cerevisiae, which also is known as baker's or brewer's yeast - that has been genetically modified to express one or more protein antigens designed to attack diseased cells by provoking a T-cell response in the immune system.

"What we do is insert the gene for a target antigen into the yeast," Rodell said, characterizing a target antigen as a "protein that is either overexpressed or mutated in cancer cells, or that is expressed in virally infected cells."

The yeast is grown in culture and then "we actually administer the whole yeast, with the protein inside, to the patients," through a subcutaneous injection, he told BioWorld Today. "What results from that is an extremely potent cellular immune response."

As opposed to causing the production of antibodies to fight the antigens, GlobeImmune's Tarmogens target "the other side of the immune system" by eliciting the help of killer T cells to destroy malignant or infected cells, Rodell said.

GI-4000, which targets Ras mutations, has demonstrated the ability to generate a cellular immune response in an earlier Phase I trial. The product also was reported to be safe in a range of doses.

The company's hepatitis C drug, GI-5005, a Tarmogen expressing a NS3-Core fusion protein, showed positive preclinical activity against HCV models. The ongoing Phase Ib study is a placebo-controlled, dose-escalation trial.

Most of the preclinical and clinical work, and all of the product manufacturing, is done in-house at GlobeImmune, which has 45 employees and is hiring for 10 other positions.

Though the Denver-based company has no active collaborations involving its clinical products, it is in discussions with other companies.

"Partnering is a significant part of our strategy," Rodell said. "Our platform is so broad that we can generate multiple products based on the yeast technology. We've already got two in the clinic, and we have two more that could go into the clinic within a year. It's more than any single company could do."

Lilly Ventures, the venture capital arm of Indianapolis-based Eli Lilly and Co., led the round. Other new investors included Brisbane, Australia-based Medica Holdings; Chicago-based Adams Street Partners; Cambridge, Mass.-based Biogen Idec Inc.; South San Francisco-based Genentech Inc.; Boston-based Partners Healthcare; and San Francisco-based GC&H Investments. They joined Series A venture firms Healthcare Ventures LLC, of Princeton, N.J.; Morgenthaler Ventures, of Menlo Park, Calif.; and Sequel Venture Partners, of Boulder, Colo.

In connection with the financing, Darren Carroll, of Lilly Ventures, and Ehud Geller, of Medica Holdings, joined the company's board. Robert Peach, of Biogen Idec, was named to GlobeImmune's scientific advisory board.

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