Raising $20 million each, two private biotech companies - Inotek Pharmaceuticals Corp. and Affymax Inc. - plan to push their lead drug candidates through clinical development.
Beverly, Mass.-based Inotek raised the funds in a Series A preferred stock financing led by Princeton, N.J.-based Care Capital LLC, New York-based Rho Ventures and MedImmune Ventures Inc., a subsidiary of Gaithersburg, Md.-based MedImmune Inc.
"It's very significant in that it really will enable us to do two things," said Jeffrey Walsh, Inotek's vice president of corporate development and commercial planning. "One is move those two products that we have in Phase II development through the rest of clinical development, and two, it will enable us to get some of our preclinical products into the clinic."
Inotek's lead products, INO-1001 and GED, are in Phase II trials. INO-1001 is an inhibitor of the nuclear cell death enzyme poly (ADP-ribose) polymerase. Over-activation of the enzyme has been associated with cell death and acute disease. Inotek is looking at cardiovascular indications but might study the drug for cancer, as well. Upcoming Phase III trials could look at INO-1001 in myocardial infarction, stroke or cardiopulmonary bypass surgery.
Walsh told BioWorld Today that the $20 million raised might not carry the company through the whole INO-1001 Phase III program, but that it will come close to covering the costs.
The company's second lead product, GED (guanidinoethyldisulfide bicarbonate), is an inducible nitric oxide synthase inhibitor. Excessive nitric oxide has been implicated in various inflammatory conditions in which Inotek will gear its Phase III trials.
Walsh said the money also would help bring four other products into the clinic within the next two years. Those products would be for either an inflammation indication or acute cell death and necrosis.
Inotek was founded in 1996 at the Cincinnati Children's Hospital by company CEO Andrew Salzman, Chief Scientific Officer Csaba Szabo, and Executive Vice President of Chemistry Garry Southan. In 1998, the company moved to Beverly, Mass., where it employs 60 people. It has kept a low profile since inception, surviving mainly on government grants instead of private investments. Since inception, it has received grants in excess of $35 million.
"So it's been a company that has been predominantly focused on developing the science first and not a lot of focus on financial markets or pharmaceutical partnerships," Walsh said. "That's changing very dramatically with the development pipeline moving to where it is."
Going forward, the company has a strategy to keep all of its products in-house, when possible. It may have to seek partners for certain large indications.
"Some indications are made for a small biotech company to build a small sales force," Walsh said. "Others are certainly not."
In connection with the Series A financing, Jerry Karabelas, a partner of Care Capital, and Mark Leschly, a managing partner of Rho Ventures, joined the company's board.
Affymax Extends Series C Round
The $20 million raised by Palo Alto, Calif.-based Affymax is an extension to a Series C financing begun last June, bringing the total raised to $40 million.
"It's going to enable us to file our first [investigational new drug application] for our first product, called Hematide, and it's also going to allow us to get our second product on an IND tract," said Affymax's president and CEO, Arlene Morris.
Hematide is a peptide that stimulates the production of red blood cells, mimicking erythropoietin. The company plans to study Hematide for two indications: renal failure and as a supportive therapy of cancer.
The second product Affymax could move into the clinic is its granulocyte-colony stimulating factor (G-CSF) agonist to enhance white blood cell formation. That product also would be studied as a supportive cancer therapy.
The company expects to file the IND for Hematide by the third quarter of this year, and the IND for G-CSF agonist sometime in 2005. The latest $20 million raised will last the company at least that long, Morris said.
Affymax raised $20 million last June when its Series C financing began. At that time, the company said it intended to file an IND for Hematide toward the end of 2003. It took the company a year longer than expected because it switched to a different molecule that showed better data, said Morris, who came on as CEO in July. (See BioWorld Today, June 30, 2003.)
Affymax has a third preclinical program involving a TRAIL R2 agonist to treat a range of cancers.
"We have some early stage leads, but not yet an IND candidate," Morris said.
The company plans to bring its products into the clinic on its own, with expectations to partner the products later.
"At some point we will look to partner Hematide as soon as we have sufficient clinical data and realize the value of it," Morris said.
Affymax's roots stem back to 1988 when it was called Affymax NV. GlaxoSmithKline plc, of London, purchased the company for $500 million in 1995. GSK spun the company back out in 2001. (See BioWorld Today, Aug. 2, 2001.)
In preclinical studies, Affymax has demonstrated improved efficacy and stability with Hematide, as compared with recombinant protein products. The company believes its peptides have several advantages to protein therapeutics. They reduce immunogenicity, improve dosing convenience, can be stored at room temperature and are easily manufactured.
New York-based Bear Stearns Health Innoventures led the Series C financing round extension. Existing investors London-based Apax Partners, and MPM Capital and Sprout Group, both of New York, also participated. As part of the Series C financing, the company appointed Elizabeth Czerepak, a managing partner of Bear Stearns, to its board.