BioWorld International Correspondent
PARIS - CareX SA, a functional genomics company developing therapies for metabolic disorders, completed a second funding round in which it raised €25 million.
The financing was led by Index Ventures, a Swiss venture capital fund with offices in Geneva and London, which is one of four first-time investors in CareX. The other three are Crédit Lyonnais Private Equity, of Paris; Global Life Science Ventures, an independent fund with offices in Germany, Switzerland and the UK; and BioMedinvest AG, of Basel, Switzerland.
The company's existing investors, Paris-based Sofinnova Partners; GIMV, of Antwerp, Belgium; and Mara Ventures, a Belgian-American fund with offices in Brussels, also participated in the financing. Strasbourg-based CareX, which was founded in 2001, had raised €6 million from those three institutions in an initial funding round completed in April 2002.
CareX CEO Geoff Race told BioWorld International that the two largest shareholders in CareX now are Sofinnova and Index Ventures, each with interests of about 25 percent.
Race pointed out that it had been a "difficult funding round," despite the fact that it was "four or five times oversubscribed." But he said he was "delighted to have raised such a large sum in an unfavorable investment environment." He added that the company now had sufficient funding to last it until 2006, when its two lead compounds are scheduled to enter Phase II trials.
Those compounds are a PPARg receptor modulator for the treatment of Type II diabetes and an LXR receptor modulator for cardiovascular diseases. The first is designed to improve uptake of insulin without the side effects of weight gain or water retention, while the second is designed to increase the level of HDL ("good cholesterol") without a rise in plasmatic triglycerides. Both are scheduled to enter Phase I trials in 2005.
CareX is focusing on therapeutics that act through the specific modulation of nuclear receptors, enabling close control of gene expression. It said the resulting compounds are as efficacious as conventional treatments but do not carry the same negative side effects.
The company's research and development is based on its Serial Analysis of Gene Expression (SAGE) technology, which identifies genes associated with phenomena such as insulin-resistance syndrome and obesity. It then validates the target genes and determines the relevant disease pathways using mouse models, before applying high-throughput screening to select leads for optimization as drug candidates.
Race said the company had seven or eight optimized compounds that were candidates for the first two clinical trials and would select the best for each pathology. Other products in the CareX pipeline are at the early stages of discovery and validation, he added.
CareX originally had hoped to begin its first clinical trials this year, but Race said the timetable was changed as part of a revised business plan he drew up after joining the company as CEO last July. He explained that he had refocused the company's business strategy to make it more product oriented, which is what investors were looking for in his view, and had scrapped peripheral activities designed to generate revenues in the short term.
Among the latter were plans for developing a database composed of adipocyte transcriptomes, differentially expressed genes and information about gene function, which CareX intended to make available to companies operating in different therapeutic fields. It was to have created the database using computer software to analyze data produced by its SAGE technology.
Now, Race said, CareX has no plans for generating revenues before it is ready to out-license products and negotiate co-development deals on the strength of the results of the Phase II trials.