Raising $65.2 million in its largest financing to date, Gemin X Biotechnologies Inc. plans to advance its lead oncology candidate through Phase II studies.
The Montreal-based company's fourth round consists of $50 million in a private equity investment and up to $15.2 million in a loan facility.
"It's an important financing because it takes our lead compound right through to proof of concept in man," said Dan Giampuzzi, president and CEO of Gemin X. "This is one of the first apoptosis drugs in the clinic so it's going to be very important to see if this is going to break open a new field."
GX15-070 currently is in an ongoing Phase I/II trial in patients with chronic lymphocytic leukemia. The compound is designed to selectively induce apoptosis in cancerous cells through pan-inhibition of proteins in the Bcl-2 family. When the proteins are overexpressed - that happens in about one-third of all new cancer cases each year - tumor progression and chemotherapy resistance occurs. Gemin X also started a Phase I trial in patients with solid tumors late last year. (See BioWorld Today, Nov. 11, 2004.)
"The advantage is that this is a small-molecule drug and the Bcl-2 pathway is populated by several family members," Giampuzzi told BioWorld Today. "Our premonition is that it's very important to be able to down-regulate all of the family members."
Giampuzzi expects GX15-070 will reach proof of concept within 18 months, but proceeds from the financing could take Gemin X into Phase III trials if that's what the company chooses to do. Gemin X also will evaluate its partnering options when the compound has a higher value at the completion of Phase II, Giampuzzi said.
Aside from developing GX15-070, the company will use financing proceeds to advance a second oncology compound into the clinic in about a year. The GX14 series compound operates in p53-defective cells. About half of all cancer cells have defects in the p53 gene. The compound selectively induces apoptosis in cancerous cells despite mutations in the p53 pathway that decreases the effectiveness of traditional therapies.
Gemin X was established in 1998 out of technology developed at McGill University. It was founded upon notions of apoptosis and cell death, Giampuzzi said.
"While many cancer cells have been characterized as growing out of control, cancer cells have also lost their ability to die or commit suicide," he said.
McGill scientists studied how viruses induce apoptosis in cells, and they studied the Bcl-2 pathway. Apoptosis is the natural process through which the body eliminates diseased or damaged cells.
"It was that biological knowledge that allowed us to discover subsequent drugs on that basis," Giampuzzi said.
Since inception, the company has raised a little more than $80 million, and the latest round is the largest to date. The previous round raised $15.3 million in the summer of 2002.
The financing was led by Atlanta-based H.I.G. Ventures and Sanderling Venture Partners, of San Mateo, Calif. Investments also came from New York-based Merlin BioMed Group; Santa Monica, Calif.-based Pinnacle Biotech Ventures Fund; and all of Gemin X's current investors. The $15.2 million loan is being provided through Investissement Quebec's Biolevier Program, a government initiative designed to advance the commercialization plans of life science companies.
"The financing for us was very strategic in that we tried to attract investors that could also participate in a potential IPO," Giampuzzi said. "So if we're able to get the data that we hope we do, then we have investors like H.I.G. and Merlin that can bridge that process for us."
The company hopes to go public on the Nasdaq National Market. It has a U.S. presence in Malvern, Pa., where its wholly owned subsidiary containing its regulatory and clinical group is located.
In connection with the financing, Aaron Davidson, of H.I.G., joined the Gemin X board.