As it moves into the clinic with its first product for Alzheimer's disease, Ceregene Inc. secured $32 million in a second financing round that also will help advance two other candidates for central nervous system disorders.
CERE-110 is slated to enter the clinic this year for Alzheimer's disease, while CERE-120 for Parkinson's disease and CERE-130 for amyotrophic lateral sclerosis (ALS) are not far behind.
"Thirty-two million dollars is a nice round, and it's going to last us quite a number of years," said Jeffrey Ostrove, president and CEO of San Diego-based Ceregene. While he declined to give the company's burn rate, he said the funds should cover work on its products up to the point of finding clinical efficacy.
The company plans to use proceeds for its three lead products - beginning clinical trials with the Parkinson's disease and ALS candidates in 2005, and funding the trial soon to begin for CERE-110 in Alzheimer's disease.
Ceregene focuses on using in vivo gene therapies to deliver nervous system growth factors using non-replicating viral vectors. Once in the nervous system, the therapies express proteins that can prevent neurodegeneration and restore normal nerve function. The adeno-associated viral vector has shown its ability to express genetic information in non-dividing target cells, such as the degenerating neurons in ALS and in Parkinson's and Alzheimer's diseases.
In April, Ceregene announced results of a Phase I trial conducted at the University of California at San Diego, showing that gene therapy might reduce the advancement of Alzheimer's disease and increase brain metabolic activity. The results prompted Ceregene to announce its plans to enter its own Phase I/II trial of CERE-110. Mark Tuszynski, UCSD professor of neurosciences, had presented the results at the American Academy of Neurology Meeting in San Francisco. Ceregene has exclusive worldwide rights to the technology, while UCSD holds the patent.
"In their study, they showed that regarding cognitive function in patients, they had about a 50 percent reduction in rate of decline that lasted about two years," Ostrove said. "The best drugs on the market today have a 5 percent to 6 percent reduction rate of decline that lasts about three to six months."
Ceregene in-licensed the technology for its programs starting in December 2002 with an agreement with Washington University in St. Louis for exclusive worldwide rights to the gene-expressing neurturin for its Parkinson's disease product. In March 2003, it licensed nerve growth factor and neurotrophic factor 4/5 for its Alzheimer's disease product from Genentech Inc., of South San Francisco. And a year ago, Ceregene signed an option agreement with the Salk Institute for Biological Studies for exclusive worldwide rights to the institute's ALS gene-therapy technology.
Ceregene expects to eventually partner its products after completing initial clinical work.
"For any private company - even a public company - it's very difficult to carry three programs like these into Phase III clinical studies," Ostrove said. "So clearly we would be looking for appropriate strategic opportunities in the future with some of these programs."
The Series B financing was co-led by Alta Partners, of San Francisco, and Boston-based MPM Capital. It also included Hamilton-Apex Technology Ventures, of San Diego; California Technology Ventures, of Pasadena, Calif.; and Cell Genesys Inc., which launched Ceregene as a majority-owned subsidiary in 2001. (See BioWorld Today, Jan. 12, 2001.)
As part of the financing agreement, Cell Genesys converted their previous bridge loan into Series B shares, giving the South San Francisco-based company a 25 percent stake in Ceregene. It initially invested $10.5 million at the time of the launch.
"I'm very pleased that with all of the ups and downs in the field of gene therapy that we had some very high-quality venture capitalists willing to look specifically at a company that is trying to develop genetic therapies," Ostrove told BioWorld Today. "With a good analysis of what we've done, they were willing to make a very important investment in us."
Following the financing, Alta Partners' David Mack and MPM Capital's Dennis Henner joined Ceregene's board. Ostrove, who has headed Ceregene as its president and chief operating officer, took on the new title of CEO.