National Editor

Talk about failing to feel the sting of tight-financing times.

With a brain cancer drug derived from scorpion venom aimed for Phase II trials in the second quarter of this year, TransMolecular Inc. (TMI) raised $33.2 million in a Series C round that the company said will be used for multiple clinical and preclinical studies.

"I think this will let us go out two-and-a-half, three years, through the first half of 2006," said Matthew Gonda, president and CEO of Birmingham, Ala.-based TMI.

Privately held TMI's most advanced product candidate is 131I-TM-601, a radiopharmaceutical combining a medicinal isotope of iodine with TM-601, a synthetic version of a naturally occurring peptide found in scorpion venom. (See BioWorld Today, July 8, 2002.)

With an ability to cross the blood-brain and tissue barriers, TM-601 binds to a receptor found only on tumor cells. That receptor is a membrane lipid involved in transmitting information from the cell surface to the nucleus.

The Phase II study with 131I-TM-601 will be conducted in patients with adult recurrent glioma.

"Once we have the dosing done, we'll be prepared to start additional clinical trials for primary glioma," Gonda told BioWorld Today, adding that the Phase II study will enroll "north of 70 patients" at six to nine sites.

"Data from that trial will probably take about 15 months" to gather, he said, and the open-label study will involve "rapid dose escalation at the beginning," which might enable the advance into primary glioma trials.

The scorpion venom technology was licensed from the University of Alabama in 1996. The company, with 11 employees - expected to grow to 45 by the end of 2005 - was formed in September 1997. Gonda came aboard in 1999.

University scientists found the venom-based compound "bound elegantly to the tumor cells but didn't bind to normal tissues, and the company has taken it beyond that" to discover the membrane-lipid aspect of the equation - which turned out to be a surprise, Gonda said.

"We'd been looking for proteins, and it turned out to be a lipid," he said. "A lot of science went into this over the past four months."

Gonda said it makes sense that scorpions, one of the earth's older organisms, would yield an effective medicine.

"The target they use for their venom is something that is shared very primitively with a lot of systems," he said. "This pathway is very common to any hyperproliferation," which means the use could go beyond primary brain cancer.

TM-601 can be used alone, coupled with radioisotopes or co-administered in cocktails of chemotherapeutic drugs to enhance its targeted therapeutic effect. In the case of brain cancer, the drug is administered intracranially. Because of the radiation involved, any other route probably wouldn't get enough drug to the tumor site, Gonda said.

"For systemic disease, I think you could certainly deliver it at lower levels and have it work [intravenously]," he said.

Data so far indicate the brain cancer drug "basically stops [the tumor] in its tracks, and we've enhanced the potency of it by adding radiation," Gonda said. "We've shown that single [administrations] of a very small dose in an animal model has extended survival 170 percent to 270 percent," with an excellent toxicity profile.

Further back in the pipeline, TMI has TM-701 as monotherapy or with chemotherapy for solid tumors in preclinical studies, with an investigational new drug application expected in the first quarter of next year. The company also has a program in pain for which a partner is being sought, Gonda said.

The financing round was oversubscribed.

"We had to cut out a number of investors, as well as trim some that were in the announcement, to make everybody fit," Gonda said. "That was really unfortunate."

The round was led by Easton Hunt Capital Partners LP, of New York, and included significant participation from TMI's existing investors Tullis-Dickerson, of Greenwich, Conn.; TVM Techno Venture Management, of Munich, Germany; President Life Sciences, of Taipei, Taiwan; and Pacific Horizon Partners, of Seattle.

New investors included Diamond Capital Management, agent for the Dow Pension Fund, of Midland, Mich.; Oakwood Medical Investors, of St. Louis; MDS Capital, of Cambridge, Mass.; Aperture Venture Partners, of New York; S.C.O.U.T. Healthcare Fund, of New York, advised by Greer Capital; Cogene BioVentures, of Houston; Global Biomedical Partners, of New York; and Posco BioVentures, the biotechnology investment arm of the Seoul, South Korea-based steel conglomerate Posco.