With its largest financing to date, Transport Pharmaceuticals Inc. intends to not only advance its pipeline, but also to double its staff within the next month.

The company raised $27 million in the Series D financing to fund clinical development and commercialization of its iontophoretic drug delivery platform. Transport has demonstrated proof of concept of its delivery device in two Phase II trials. Pivotal trials in the U.S. and Europe are expected to begin in 2005.

Carlyle Venture Partners, of Washington, and Quaker BioVentures Inc., of Wayne, Pa., co-led the round, which included existing investors, such as those affiliated with Pittsburgh-based The Hillman Co. and new investor EGS HealthCare Capital Partners, of Rowayton, Conn.

"This is a very significant financing," said Dennis Goldberg, president and chief operating officer of Philadelphia-based Transport. "This will allow us to finish the Phase III programs in the U.S. and Europe, and also to start clinical development of some of our R&D programs."

Goldberg also is the president and CEO of Nexus Therapeutics Inc., of Framingham, Mass., a company that provides management services for Transport, which is a virtual company. So far, Transport has eight employees, Goldberg said, but the company intends to add another 10 employees next month. Charles Hadley, a managing director of Rock Hill Ventures, serves as Transport's chairman and CEO.

Transport's lead product is a treatment for herpes labialis, or cold sores. The company's technology delivers the approved treatment acyclovir directly to impacted skin at concentrations up to 40 times higher than topical formulations. Two placebo-controlled Phase II studies showed the product demonstrated significant reductions in healing time in more than 300 patients.

The delivery platform is based on iontophoresis, a technology employing a low-voltage electrical charge to increase skin permeability in order to locally deliver medication through the skin. Transport has developed a small, wireless electrode and medication applicators that will allow patients to self-administer topical drugs for a variety of indications outside of cold sores, including onychomycosis and psoriasis.

Ryan Schwarz, a principal at Carlyle Venture Partners, said that the market opportunity in treating herpes labialis is conservatively estimated at $400 million. And the company could expand its platform to address several other dermatologic indications, said Richard Kollender, a principal at Quaker Bioventures.

The Series D financing brings the total amount raised by Transport to $33 million since its November 1999 inception. The company has a number of preclinical candidates for dermal conditions.

"Within the next 18 months, we'd like to put at least one other product in the clinic for a different indication," Goldberg told BioWorld Today. "We're not sure what that will be."

The $27 million should take the company forward about two and a half to three years, Goldberg said. The company hopes to receive funding from corporate deals in the meantime.

"We're not planning to do any other financings," he said.

While Transport's technology was internally invented and developed, the company does plan to find a partner for marketing purposes once a clear value can be established.

"If you look at herpes, you've got 50 million people in the U.S. [affected] and that requires direct consumer marketing," Goldberg said, "and that's something beyond the ability of a small company to do."

Cold sores usually are caused by the herpes simplex virus type 1.