Barely a year-and-a-half old, Compound Therapeutics Inc. is inching closer to the clinic with an oncology candidate thanks to its recent acquisition of Phylos Inc.'s assets.

The Waltham, Mass.-based company said Tuesday it purchased Phylos' assets, which include PROFusion display technology that enables researchers to isolate high-affinity binding proteins. Compound Therapeutics completed the acquisition in December.

The PROFusion technology is a platform for binding proteins called Trinectins, which target vascular endothelial growth factor ligands and the VEGF receptor. Since inception, Compound Therapeutics has worked with binding proteins linked to enzymes called Target Addressable Enzymes - or Adzymes - in order to find lead drugs.

"We see a lot of synergy with their technology," said John Edwards, vice president of commercial development at Compound Therapeutics. "We also see that their technology stands alone from the perspective that it really allows us the opportunity to develop highly specific proteins that can be targeted to various therapeutics targets, independent of our Adzyme technology."

The purchase, which included all of Phylos' patent rights, cost Compound Therapeutics about $4 million, Edwards said. Considering that Phylos, of Lexington, Mass., has been developing its PROFusion technology for the past five years and spent about $50 million in development, the price was a bargain. The acquisition did not include some specific assets of Phylos, such as equipment, but it did include some scientific personnel.

With the new technology, Compound Therapeutics is advancing several drug candidates to treat cancer through a preclinical program that focuses on Trinectin compounds. The compounds offer the advantages of broader and longer-lasting activity over competitive VEGF anti-angiogenic products, the company said. While Edwards would not pinpoint a specific time, Compound Therapeutics likely will file its first investigational new drug application in the near term.

"[Phylos'] product development is certainly quite far along," Edwards told BioWorld Today, "and we're really pleased. It allows a company like us to accelerate the filing of an IND."

Founded in September 2002, Compound Therapeutics raised $12 million in a Series A financing a year ago. At that time, the funding was expected to last about two years. The company's strategy is to take lead compounds into early clinical development, then partner the compounds for later-stage work. (See BioWorld Today, May 29, 2003.)

The company likely will conduct a Series B financing soon.

"We'll be looking to secure that this year," Edwards said.

Three venture capital firms funded the private company: Boston-based Atlas Venture; Cambridge, Mass.-based Flagship Ventures; and Waltham, Mass.-based Polaris Venture Partners.

Compound Therapeutics describes itself as a company that uses an advanced product platform for engineering new protein drugs with higher potency, greater specificity and lower dosing than conventional protein drugs. That platform now includes Phylos' PROFusion, which is used to engineer new proteins in four disease areas: oncology, inflammation, autoimmune disorders and infectious disease. The platform allows the company to synthesize Trinectins and Adzymes.

Adzymes are designed to combine the catalytic activity of enzymes with the target-binding specificity associated with antibodies and receptors. Compound Therapeutics is developing Adzymes against tumor necrosis factor to be used as a treatment for rheumatoid arthritis and other autoimmune and inflammatory diseases, such as psoriasis and Crohn's disease.

Trinectins are based on the domain of a naturally occurring plasma protein called fibronectin. Compound Therapeutics expects minimal immune reactions that would interfere with the utility of a Trinectin drug, because it is derived from a naturally occurring protein. The company also expects the low molecular weight and compact nature of the molecule to result in a highly stable stucture that could enhance target-antigen binding.

"We just see this as a great opportunity for Compound Therapeutics," Edwards said. "We're just really excited about the technology we've been able to acquire, and the number of excellent scientists that have been able to join our company."