West Coast Editor

A month and a half after starting Phase II work with MM-093, its lead drug candidate for rheumatoid arthritis, Merrimack Pharmaceuticals Inc. raised $28.3 million through the sale of Series D preferred stock and secured a $9 million venture loan.

"This is primarily extra money to extend our runway," said James Scibetta, chief financial officer of Cambridge, Mass.-based Merrimack, with the loan added for more capital with less dilution.

MM-093 is a recombinant version of human alpha-fetoprotein (AFP), made in transgenic goats. Produced by the human fetus during pregnancy, AFP is associated with remission of autoimmune diseases, including RA, during the third trimester, when AFP reaches a peak in the pregnant woman's blood.

Researchers still are trying to define AFP's mechanisms of action, mainly because of a lack of consistent, pure source for testing. With partner GTC BioTherapeutics Inc., of Framingham, Mass., a recombinant form of the gene for human AFP has been put into goats, which yield MM-093 in milk when they lactate.

Along with the RA trial, expected to finish in mid-2006, Merrimack plans to investigate MM-093 further for psoriasis this year, and sees "broad opportunities" in autoimmune diseases, including multiple sclerosis, Scibetta told BioWorld Today.

Merrimack deploys what it calls Network Biology, integrating biology, technology, high-throughput microarray analysis and computing, which the company says provides an "exponentially more detailed view" of disease than traditional methods. Merrimack is expanding its pipeline to include regulators of growth factor signaling and apoptosis.

Returning equity investors include Sorenson Development Inc., of Salt Lake City, and affiliates, along with Unilever Technology Ventures Fund BV, of Santa Barbara, Calif., and Wharton Biotechnology Partners, of New York. New equity investors include, among others, London-based WT Investment Advisors. The venture loan was provided by Palo Alto, Calif.-based Hercules Technology Growth Capital.

Merrimack last spring raised $28 million in a Series C financing, its largest to that point. Since its founding in 2000, the company has garnered about $78 million in equity capital, and $87 million in total capital.