West Coast Editor

Panacea Pharmaceuticals Inc. raised $7 million in a Series C round for its preclinical program focused on the enzyme human aspartyl (asparaginyl) beta-hydroxylase, or HAAH, found overexpressed on surface cells in more than 20 tumor types.

"We're focusing on liver cancer for clinical models," said Kasra Ghanbari, co-founder and board member of Gaithersburg, Md.-based Panacea, though definite decisions will not be made until later.

Whether the research will yield as much therapeutic fruit, as the company's "cure all" name suggests, is yet to be seen, but researchers have found HAAH in primary tumor tissue in the pancreas, breast, ovary, liver, colon, prostate, lung, brain, and bile duct, with overexpression of the enzyme in 99 percent of more than 1,000 tumor specimens tested so far.

Kasra Ghanbari, co-founder and board member of Gaithersburg, Md.-based Panacea, said the company plans to file an investigational new drug application in 20 months to 24 months, with liver cancer the likely first therapeutic focus, followed by bile duct and pancreatic tumors.

With the Series C round, available cash will take the company "well into 2006," he said, although "we have been positioning to go out almost immediately for a Series D in the fall."

HAAH is not found in non-diseased or adjacent tissue, and Panacea has engineered an all-human, single-chain antibody fragment against it by way of yeast display technology at the Massachusetts Institute of Technology. The molecules have shown what the company described as "outstanding characteristics" as potential cancer drugs.

Studies have tested anti-HAAH antibodies in vivo to find that the murine forms of the antibodies inhibit tumor formation and growth in a xenograft model of primary human liver cancer. The antibodies also significantly reduced the number and size of metastases in a model of human colon cancer metastasis to the liver.

In 1999, the year of its founding, Panacea licensed exclusive worldwide rights to the HAAH program from Rhode Island Hospital and Brown University. Two years ago, the firm established a wholly owned subsidiary to develop in vitro diagnostics, including pharmacogenomic and pharmacoproteomic tools for cancer detection, diagnosis, prognosis, treatment selection and follow-up. (See BioWorld Today, May 14, 2003.)

"We were being encouraged by shareholders and even potential strategic partners to separate diagnostics from therapeutics," Ghanbari said. Over time, though, the two areas were reintegrated, based on what large pharmaceutical firms that might turn into partners seemed to like better.

Panacea hopes to partner the HAAH effort within about two years.

"Ideally, we'd like to test the waters with a larger round of financing" first, Ghanbari said, and begin serious talks about collaborations within about two years. "I don't think we're quite exhausted about how far we can take [the research independently]," he said.

Participants in the round included Japanese investors Mitsubishi Corp. Life Sciences Venture, Olympus, JSR, Shin-Etsu Chemical, Fuji Photo Film, Dai Nippon Printing, and Tokio Marine & Nichido Fire Insurance, among others.

"If they're not in Tokyo, they're just outside Tokyo," Ghanbari said.

The investments were secured through the assistance of Washington-based Cosmos Alliance, described as a "new model" for fostering global investments and business collaborations.

"They work almost entirely with Far Eastern companies looking to grow in the life sciences," Ghanbari said. "Basically, they pre-select a handful of start-up or emerging companies and work with larger corporations that need help or counsel on where to make investments, which technologies will affect the future of this marketplace. They act as a finder."

Cosmos has "done quite a bit of work in Korea, Hong Kong, that general area, but I think they would say the majority of the focus is Japan."

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