BioWorld International Correspondent
LONDON - Arrow Therapeutics Ltd. raised more than £21 million in the first close of its second-round funding, which should enable it to advance two antiviral products into clinical trials next year and complete preclinical development of antibacterial leads.
The second close is expected by the end of the year, bringing the total for the round to £25 million (US$41.7 million).
It ranks as the largest private funding in the UK this year, and, coming in the same week as BioVex Ltd. raising £17 million, provides hope that market conditions are improving.
Ken Powell, CEO, told BioWorld International, "We went out for £20 million and exceeded that. In fact, the lead investor, Atlas Venture, encouraged us to increase it to £25 million so we have enough to last until the end of 2005, even without a partnering deal."
Atlas is joined as a new investor by Scottish Widows Investment Partnership, of Edinburgh, Scotland, and two Japanese firms: NIF Ventures and ITX. Existing investors GIMV, Alta Partners, 3i Group, Techno Venture Management, Unibio Ltd. and Northern Venture Managers all contributed.
"It has always been our philosophy to bring in a broad base of investors so we can use them to network," Powell said. "This has helped us enormously in the U.S.
"During this round, we spent time in Japan to bring in Japanese investors because it is such an important market," he added. "The investors have already facilitated some introductions."
London-based Arrow intends to partner its programs between preclinical and Phase IIb, depending on the therapeutic area. Its lead antiviral compounds against respiratory syncytial virus (RSV) and hepatitis C both are expected to reach Phase II by 2004. In antibacterials, the company has reached the stage of lead selection and expects to move a compound into full preclinical development early next year.
The RSV treatment will enter Phase I at the beginning of 2004, just three years after target discovery began.
"One of the advantages of the anti-infective area is that you can move products forward quite quickly and the success rate of anti-infectives in the clinical stages is considerably higher than the industry average," Powell said.
Arrow's genomics platform allows it to identify the genes that are required for survival of a particular microorganism in a single experiment. In general, around one-third of genes are essential. From that, Arrow shortlists 20 or so that are most promising for screening.
Arrow was spun out of University College London in 1998, and has raised £19.6 million in previous funding rounds.