Pharmasset Ltd. completed its largest financing to date, raising $40 million in a Series D round that will help advance its two clinical HIV products.
The Atlanta-based company conducted the round with several new and existing investors. It plans to use the funds to move forward Reverset and Racivir, as well as its preclinical candidates. The company also plans to increase its employee base with the new funding. It currently has 29 employees.
"Certainly the financing is significant as far as helping to advance our clinical programs, bolster our discovery research efforts and help to move the company forward," said Alan Roemer, the company's vice president of business development and general manager.
San Francisco-based Burrill & Co. led the round, which included significant participation from new investor MDS Capital, of Toronto, along with CDIB Bioscience Ventures, of Taipei, Taiwan, and existing investors, MPM Capital, of Cambridge, Mass., and Techno Venture Management (TVM), of Munich, Germany. Banc of America Securities LLC, of New York, served as placement agent for the financing.
TVM was the sole investor in Pharmasset's Series C round conducted in March 2001, which raised $7.4 million. MPM was the sole investor in the June 1999 Series B round that raised $3.9 million. The company's Series A round occurred at its June 1998 inception, raising about $4.5 million from individual and strategic partners.
All told, the company has raised more than $55 million.
"We're just pleased to once again have a round of investment that includes premiere biotech investors," Roemer told BioWorld Today. "This is an important financing obviously for the company, but it also is important for biotechnology in the state of Georgia and in the Southeast."
Pharmasset's lead antiretroviral product, Reverset, became the subject of a collaboration signed in September with Incyte Corp., of Palo Alto, Calif. Incyte gained exclusive development, manufacturing and marketing rights to Reverset, an oral nucleoside analogue, in the U.S., Europe and other unnamed markets in exchange for an up-front payment and potential milestone and royalty payments. Pharmasset retained marketing and commercialization rights in South America, Mexico, Africa, the Middle East, Korea and China. (See BioWorld Today, Sept. 9, 2003.)
Reverset targets HIV-1 and HIV-2 reverse transcriptase and inhibits replication of wild-type and mutant strains of HIV commonly seen after treatment with zidovudine and lamivudine. It currently is in a Phase IIb study in combination with other antiretroviral agents.
"This involves 180 treatment-experienced HIV-infected individuals and is taking place in 22 clinical sites in the U.S. and Europe," Roemer said.
Incyte has said it expects to report results from the Phase IIb trial sometime next year and then could move into two pivotal Phase III trials, filing a new drug application in late 2006. The potential market in the U.S. and Europe is estimated between $250 million and $500 million annually.
Clinical studies of Reverset show it is well tolerated, with mild adverse events occurring at the same rate as placebo. Phase II data on 30 treatment-na ve patients and 10 treatment-experienced patients showed a marked reduction in viral load after 10 days of monotherapy treatment. The treatment-experienced patients had failed a mean of 5.5 regimens and half had four or more thymidine analogue mutations at the start of Reverset treatment. Incyte presented the data in July at the 15th International AIDS Conference in Bangkok, Thailand. (See BioWorld Today, July 13, 2004.)
The company's second product, another nucleoside reverse transcriptase inhibitor called Racivir, is in Phase II clinical trials in combination with Zerit and Sustiva.
"This program is being conducted completely in-house by Pharmasset under an approved IND application," Roemer said.
Last year, the company reported data showing the sustained anti-HIV effect of Racivir combined with Zerit (D4T, Bristol-Myers Squibb Co.) and Sustiva (efavirenz, DuPont Pharmaceuticals Inc.). Oral administration of Racivir in combination with the two other drugs resulted in an expected rapid initial drop in viral load.
Pharmasset, which was spun out of Emory University in Atlanta, remains focused on HIV and hepatitis and has a variety of advanced preclinical programs.
Roemer said the company has not publicly disclosed an overall strategy indicating whether it has plans to one day market or co-market its own products, or to partner them and focus mainly on early development. He declined to disclose Pharmasset's burn rate, but said the $40 million financing gives the company a significant amount of cash to move forward. When the company needs to raise more, it will consider its options, which include conducting an initial public offering or returning to private investors, he said.
As part of the Series D financing, Steven Burrill, founder and CEO of Burrill & Co., will joint Pharmasset's board.