Microbia Inc. brought in $40 million in a fourth-round financing that will take the company into the clinic with its two lead compounds.

"It's the most that we've raised so far," said Susan Brady, a spokeswoman for the Cambridge, Mass.-based company. "It's a great financing. It's an obvious endorsement of what we're doing here and we're really happy about it."

Microbia expects to file an investigational new drug application in the third quarter to begin clinical trials of its lead product, MD-1100, to treat irritable bowel syndrome. The company also created a dual-action, non-narcotic analgesic to treat acute and chronic pain that is expected to enter the clinic by the end of this year.

Since its 1998 inception, Microbia has raised about $99 million, including the fourth-round funds. The company focuses on discovering and developing small-molecule drugs to treat gastrointestinal disorders, serious fungal infections, and pain and inflammation.

Brady told BioWorld Today that Microbia will spend a substantial amount of the financing proceeds on clinical trials of MD-1100 and the company's analgesic, but money also would be earmarked for the early development of an antifungal to treat life-threatening disorders.

"We're using it to push our programs forward and to fund the clinical development of the two compounds that we have right now," she said.

A new investor, Paperboy Ventures LLC, led the financing. Other new investors were New York-based Invus LP; Bio*One Capital, the biomedical investment arm of the Singapore Economic Development Board; Alton Ltd.; and San Diego-based Linkagene LP. Existing investors also participated.

Microbia believes the market for constipation-predominant IBS (c-IBS) includes 10 million people in the U.S. IBS is a chronic condition marked by abdominal pain and disturbed bowel function. Health care costs associated with IBS exceed $25 billion annually, according to Microbia. In addition to c-IBS, there are two other subgroups of the syndrome, diarrhea-predominant and alternating. About 30 percent to 40 percent have c-IBS, Microbia's target indication. If approved, MD-1100 would compete with Basel, Switzerland-based Novartis AG's Zelnorm, the first approved product for c-IBS.

MD-1100 is a first-in-class prokinetic agent aimed at relieving the pain and constipation of c-IBS. Orally delivered, the agent acts locally in the intestine, targeting a novel receptor.

As for its pain product nearing the clinic, Microbia believes its dual mechanism of action will provide superior pain control compared to non-steroidal anti-inflammatory drugs and have a similar gastrointestinal safety profile as cyclo-oxygenase-2 inhibitors, the two classes of drugs that dominate the non-narcotic analgesic market. More than 50 million people in the U.S. suffer from acute and chronic pain, the company said.

At the earlier stage of research, Microbia is developing an antifungal therapeutic named Anti-Invasins. The agent would be used for severe systemic infections and will have the potential for use in oral candidiasis and other fungal infections. The worldwide antifungal market exceeds $3 billion and is growing, Microbia said. Anti-Invasins would block the ability of fungi to invade human tissue and cause disease by interfering with a set of targets that are critical to pathogenesis in fungal species. Microbia plans to select a development candidate in the second half of this year.

Aside from working on its clinical pipeline, Microbia generates income from its Precision Engineering business, which has entered seven deals to date. The business has two engineered fermentation strains in commercial manufacture. Precision Engineering is an approach to metabolic engineering in creating microbial microfactories that produce pharmaceuticals and fine chemicals. Microbia's technology is based on broad knowledge of the regulatory mechanisms that microbes use to sense and respond to changes in their environment.

In addition to the $40 million raised this week, Microbia raised $9.8 million in its first round conducted in 1999, $23 million in its second round conducted in 2000 and $26 million in its third round in 2002.

The company was founded by its CEO, Peter Hecht, as well as Brian Cali, Todd Milne and Eric Summers, all former research fellows at Massachusetts Institute of Technology's Whitehead Institute for Biomedical Research.