Little more than a year after starting a business based on spontaneous tumor models in mice, GenPath Pharmaceuticals Inc. raised $42.7 million in a Series B financing.
That follows a $15.5 million Series A completed when the company opened its doors in May 2002. (See BioWorld Today, May 20, 2002.)
GenPath, a Cambridge, Mass.-based company that employs 45 people, counts itself among the start-ups likely to succeed because of its world-class staff and technology, plus quality investors and a two-pronged business approach, it said.
"I am very aware that in this financial environment it is difficult for people to raise money," Tuan Ha-Ngoc, company president and CEO, told BioWorld Today.
It took GenPath 15 weeks to raise the $42.7 million, and if the future runs according to plan, Ha-Ngoc believes the money will finance the company for the next two to three years. GenPath has about $50 million in cash and more than 50 million outstanding shares.
GenPath was founded on technology developed by Ronald DePinho and Lynda Chin, two researchers at Harvard Medical School, and the company uses it to fight cancer and other diseases.
"Our company focuses on discovering and developing new cancer therapeutics," Ha-Ngoc said. "That, in and of itself, is not that exciting because hundreds of other companies are doing that. But the key valuable position GenPath has is our technology platform. We have a spontaneous tumor model in mice that allows us to recreate a tumor that is going through a full evolution from initiation to growth. [We can] flip a switch and the tumor goes through regression and recurrence. All of that is done in an immuno-competent animal with a tumor that is formed from its own cells."
GenPath doesn't believe its science will yield as many false positives as the type of science that transfers cancer cells into mice. "In cancer research today, people are doing scientific research in humans because of the lack of ability to do scientific experimentation in animals," he said. "The field is looking for a more predictive model."
Also, Ha-Ngoc said he believes the genomics approach does not allow researchers to establish causality. But with GenPath's animal model, "We can spontaneously create a tumor, we can apply functional genetics screening techniques to identify genes in vivo that would be essential to the growth of a tumor - by essential I mean that if one would inhibit the gene in that animal model, you would see the tumor regress - so you establish causality," he said.
Once scientists identify the important genes, or genes in the "growth maintenance phase," considered clinically relevant by GenPath, therapeutics can be administered to cause the tumor to regress, Ha-Ngoc said.
The first gene GenPath has identified is now the subject of a collaboration signed in July with Array BioPharma Inc. Under the agreement, Array will receive research funding and will be entitled to receive milestone payments based on the selection and progress of a development candidate. GenPath retains full rights to the products.
Going forward, Ha-Ngoc said GenPath will look for other corporate partnerships and currently is looking to in-license or acquire projects that are more advanced in the clinic.
"We won't compete with the Amgens of the world," Ha-Ngoc said. "We are looking for Phase II or late-stage preclinical or early stage Phase I in which we can apply our technology, and hopefully we will do it more efficiently."
The Series B round was led by Flagship Ventures Inc., also of Cambridge; Highland Capital Partners, of Lexington, Mass.; Oxford Bioscience Partners, of Boston; MPM Capital LP, of Boston; Venrock Associates, of New York; Prospect Venture Partners LP, of Palo Alto, Calif.; Greylock, of Boston; and private investors Grant Heidrich and Kenneth Weg, former vice chairman of Bristol-Myers Squibb Co., of New York.
Concurrent with the financing, Muzammil Mansuri, of Flagship Ventures, and Robert Higgins, of Highland Capital Partners, were added to the GenPath board.