BioWorld International Correspondent

LONDON - Just 16 months after spinning out of Southampton University, Synairgen plc is to float on the Alternative Investment Market in London, seeking £10 million (US$18 million) and giving the company a market capitalization of £45 million.

Speaking between meetings with potential investors, Simon Shaw, nonexecutive director, told BioWorld International: "The fund raising is going exceptionally well. We have targeted a sensible valuation and expect to complete quite quickly."

Synairgen's attractiveness stems from the research record of its founding scientist, Stephen Holgate, professor of immunopharmacology, who has spent 20 years investigating the underlying causes of asthma, chronic obstructive pulmonary disease (COPD) and other respiratory diseases. Among other discoveries, he uncovered ADAM33, a gene on chromosome 20 that plays a major role in making the epithelium of the lungs oversensitive to environmental pollution, thus increasing the risk of asthma. He also was involved in the development of the anti-immunoglobulin E antibody on which Xolair (Novartis AG and Genentech Inc.'s drug for treating allergic asthma) is based.

The formation of Synairgen was funded by IP2IPO plc, a technology commercialization company, which holds 47.4 percent of the equity prior to the placing.

Synairgen has two products in late preclinical development. The first is a growth factor the company discovered and modified that acts on the lung epithelium, enabling it to resist environmental insults.

The second product is based on Holgate's discovery that the reason why asthmatics are likely to suffer severe attacks when they catch a common cold is that they cannot generate interferon beta at the epithelium to enable them to resist the rhinovirus that causes colds. Synairgen is preparing a challenge study in which a small number of subjects will be infected with rhinovirus and treated with interferon beta.

The company holds a patent on the use of interferon beta to treat asthmatic attacks brought on by the common cold, and is ready to begin formulation work.

Synairgen has developed a range of human in vitro models of asthma and COPD. Both products have tested positive in those models.

Beyond those two compounds, Shaw said Synairgen will generate a pipeline based on the analysis of the different biomarkers found in the blood and lung secretions of healthy people and those with chronic lung disease.

"There is an increasing appreciation of disease stratification in asthma; there are, in fact, lots of different types. We are focused on the severe end where there are no treatments currently," he said.

The intention is to partner at the end of Phase I. "The entire business model is to license out because that's what large pharma is seeking. We are a pipeline filler," Shaw said. He added that the £10 million raised in the flotation will see the company through to profitability.

"We are not intending to come back for any more," he said.

The company also has three collaborations, with Merck Frosst (an affiliate of Merck & Co. Inc.); Cambridge Antibody Technology Group plc, of Cambridge, UK; and one undisclosed partner, to co-discover and test compounds in its proprietary models.

Shaw, along with Synairgen's managing director, Richard Marsden, and John Ward, finance director, was formerly employed at Profile Therapeutics plc, a specialist in inhaled treatments for respiratory diseases, which was acquired by Respironics Inc., of Murrysville, Pa., in July.

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