PTC Therapeutics Inc. raised $35 million to support its initial clinical drug development activities and other product research.
The Series E private equity financing marks the latest preferred stock placement for the privately held company, which has netted $91 million in such funding to date. South Plainfield, N.J.-based PTC expects the latest proceeds to last through 2005.
"It's a trying financing environment, for private investment at least," PTC President and CEO Stuart Peltz told BioWorld Today. "But we have done pretty well in hitting our milestones and goals in a unique area of drug discovery. And we have had a strongly committed group of investors who have seen the progress and backed us. With them on board, we also went out to private groups who haven't previously invested in PTC, so the combination of having a strong internal commitment and obtaining new investments allowed us to get where we are today."
PTC, which is applying its integrated RNA biology and chemistry platforms to discover and develop small-molecule drugs, plans to use the funding to support the clinical development of its lead candidate, PTC124. The company expects to submit the compound's investigational new drug application next quarter, with initial clinical trials scheduled in patients with muscular dystrophy and cystic fibrosis.
"This is an exciting product," Peltz said. "It treats a subset of patients with virtually all genetic disorders that have a type of mutation called a nonsense mutation."
The genetic alteration disrupts the protein-coding region of a gene, upsetting synthesis and causing the production of incomplete proteins. Preclinical testing of PTC124 in genetic disorder models has shown the compound to be effective, well tolerated and orally bioavailable. In addition to Duchenne muscular dystrophy and cystic fibrosis, other indications for which the drug's development might be pursued include lysosomal storage disorders and hemophilia.
"In a sense, the drug allows you to bypass the nonsense mutation and go on to make a full-length, active protein," Peltz said. "The drug is a really a new paradigm in medicine. First you diagnose the disease, then you genotype the patients. And based on whether the disease is due to this nonsense mutation, you have a drug to treat those patients."
Incorporated in 1998 and born from research conducted at the Robert Wood Johnson Medical School at Rutgers University, the company developed PTC124 and its other compounds through internal efforts resulting from its platform technology in post-transcriptional expression of proteins.
PTC also plans to direct a portion of the latest funds to continue advancing several preclinical-stage programs that recently entered lead optimization. An anti-angiogenesis oncology program targets post-transcriptional control of VEGF, while its antiviral program is focused on hepatitis C. Peltz said both would produce clinical candidates in the next year.
"We have a robust pipeline that we hope will continually add clinical candidates," he said, "both for business development opportunities and for our own in-house clinical work."
The financing round was led by CSFB Private Equity, the private equity arm of Credit Suisse First Boston in New York, and HBM Bioventures, of Zurich, Switzerland. Others in the investment syndicate consisted of new and existing backers, including Bay City Capital, of San Francisco; Delphi Ventures, of Menlo Park, Calif.; Hansa Special Opportunities Fund Ltd., of Bermuda; HealthCap, of Stockholm, Sweden; Novartis BioVentures, a sub-fund of the Novartis Venture Fund family of Novartis AG, of Basel, Switzerland; Novo A/S, wholly owned by the Novo Nordisk Foundation of Novo Nordisk A/S, of Bagsvaerd, Denmark; Posco BioVentures, whose sole limited partner is the Korean steel company Posco; and Vulcan Capital, of Seattle.
Simultaneous with the investment, HBM's Axel Bolte and Vulcan's Michael Kranda joined PTC's nine-person board.