BioWorld International Correspondent
Biovertis AG, of Vienna, Austria, secured up to €12 million in its first round of venture financing.
The company, which was spun off from Intercell AG in September 2003, works to discover and develop antimicrobial drugs for infections caused by antibiotic-resistant bacterial pathogens.
"This is a significant opportunity for biotech," said Erich Felber, Biovertis' CEO. He added that there had been substantial investments in antimicrobials from big pharma in the past, which had been cut back and would be difficult to restart. Felber saw a five- to 10-year period in which biotech companies could fill a rising medical need and win an important market. He cited dramatic increases in resistant infections in all developed countries as evidence of the growing need for new antibiotics.
Biovertis' technology is intended to make discovery and preclinical development of new antibiotics more efficient and effective. The process involves taking sera from patients who have had bacterial infections and identifying the antigens produced from an immune response. The company then uses a combination of nuclear molecular resonance technologies and bioinformatic processes to narrow the 2,000 to 4,000 potential targets identified down to hundreds.
"Our bioinformatics processes help to elucidate the predicted structure of targets," Felber said. "Together with the NMR approach, in a short period we can get very good data on the 3-dimensional structures involved." The company's third element is a method of physical screening to generate chemical structures that can be the starting point for medicinal chemistry.
"From that point onward, that is from medicinal chemistry and process development, we will be using service providers," Felber said. Felber said he expects to announce deals in the near future.
"Any start-up has just a few years to develop a visible pipeline," Felber said. "We have a program in Gram-positive hospital-acquired infections and one in respiratory infections."
Biovertis aims to eventually bring its discoveries into Phase II testing with its own resources. At present, the company expects to have a Phase I compound ready by the end of 2006. Felber added that the new financing will last into 2007.
Lead investor in the round was Techno Venture Management, of Munich, Germany. Further funds came from Kapital & Wert Group, of Vienna. In addition to the Series A financing, the company has been awarded start-up grants and loans, some publicly supported, totaling more than €5 million (US$6 million) over the next five years.
The company's spinning out was a combination of scientific and financial intervention.
"Intercell realized that their antigen identification was bringing up novel bacterial targets," Felber said. "In order to pursue that potential, they would have had to build an effort in small molecules and different indications." The company decided that financial markets probably would not support dilution of its pipeline with earlier-stage efforts outside its core interests. Rather than see the potential remain un-pursued, Intercell formed Biovertis.
The relationship remains close - Biovertis uses Intercell technology, Biovertis' chief scientific officer was responsible for Intercell's antigen-identification program and Intercell retains a 25 percent equity stake after the Series A.
Felber, a co-founder of Micromet AG, of Munich, is one of Europe's few serial entrepreneurs. Of joining another new company, he said, "I wanted the opportunity to apply my knowledge of growing a start-up over 10 years to another start-up."