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Raising $15 million in a Series B financing, Acuity Pharmaceuticals Inc. said it has begun Phase I trials with Cand5, its drug for age-related macular degeneration that uses RNA interference.

"This is a historic first," said Dale Pfost, president and CEO of Philadelphia-based Acuity, noting that although a handful of companies are working with RNAi, none has entered human studies.

Cand5 uses RNAi to turn off genes that produce the vascular endothelial growth factor, believed to be a primary cause of the excess leakage and blood-vessel growth that lead to progressive blindness in patients with AMD.

"The financing is designed to take us all the way through Phase I, as well as Phase II," Pfost said, adding that the $15 million represents the firm's total cash balance. "We're aiming to have the Phase II results in 2006." Acuity disclosed earlier this year that investors had committed the money. (See BioWorld Today, May 12, 2004.)

Acuity's approach, Pfost said, focuses on vascular endothelial growth factor (VEGF), "the culprit so to speak, and the central player in the pathogenesis in AMD as well as diabetic retinopathy. The traditional biotechnology approach would be to make an antagonist to neutralize the disease-causing protein, but there simply can't be enough of it. We have the ability to go upstream and stop the VEGF before it's produced."

Cand5 is delivered via injection to the eye, where it moves toward the back and into retinal pigment epithelial cells (which are responsible for producing VEGF). The drug's efficacy is said to last several weeks.

Other AMD treatments in development, Pfost noted, "are very selective and only work for sub-classifications of the disease and can exacerbate others."

Whether more money will be sought for Phase III or the drug will be partnered after Phase II is not certain, Pfost told BioWorld Today.

"During 2006 we look forward to the opportunity to make those decisions," he said.

Meanwhile, despite competition in the growing RNAi field, Pfost is confident about the firm's intellectual property.

"We've been doing this for, by far, the longest," he said. "We have a very strong patent position," with paperwork filed "very early in the history of RNAi." Some platform companies have made inroads with "sort of shadow programs" of Acuity's work, he said.

Among other firms working in the space is Alnylam Pharmaceuticals Inc., of Cambridge, Mass., which this summer acquired exclusive access from Hybridon Inc. to patents that protect targets to VEGF for ocular indications with RNAi molecules. In March, Alnylam entered a strategic alliance with Isis Pharmaceuticals Inc., of Carlsbad, Calif. (See BioWorld Today, Aug. 5, 2004.)

Acuity is listed among Alnylam's would-be competitors in SEC filings, along with Sirna Therapeutics Inc., of Boulder, Colo.; Nucleonics Inc., of Horsham, Pa.; Benitec Ltd., of Queensland, Australia; and CytRx Corp., of Los Angeles.

The current standard treatment for AMD and diabetic retinopathy, Visudyne (verteporfin), is marketed by QLT Inc., of Vancouver, British Columbia, and Novartis AG, of Basel, Switzerland. A late-stage product for the same diseases, Macugen (pegaptanib sodium), is being developed by partners Eyetech Pharmaceuticals Inc. and Pfizer Inc., both of New York. Macugen's new drug application is under review by the FDA.

The Series B financing for Acuity was led by Psilos Group Managers, a health care-focused venture capital firm in New York. Other new investors include Johnson & Johnson Development Corp. (JJDC), the venture capital subsidiary of Johnson & Johnson, of New Brunswick, N.J.; Och-Ziff Capital Management Group, of New York; Diamond Capital Corp., of Tokyo; and Trans-Science Inc., also of Tokyo.

BioAdvance, of Philadelphia, and Ben Franklin Technology Partners, of Harrisburg, Pa., converted promissory notes into the Series B round, and a number of other investors from the first financing round also participated. David Eichler of Psilos Group and a representative of JJDC are joining Acuity's board.

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