National Editor

Gearing up to file later this year an investigational new drug application for a "bioregulator" drug targeting autoimmune disorders, Protalex Inc. raised about $12.7 million through a private placement of 7.5 million shares, with warrants to buy another 2.6 million.

First target: rheumatoid arthritis, said Steven Kane, president and CEO of Albuquerque, N.M.-based Protalex.

"Our hopes are generally that we will be able to not only have a palliative effect on RA, but to potentially offer a longer-term remission of symptoms," he told BioWorld Today. "It's a clear pathway for us, a well-defined pathway to approval. Immunex [with Enbrel] and Abbott [with Humira] have obviously done a good job of blazing the trail."

Four previous private placements by Protalex have yielded $3.4 million, carrying the firm through early research and preclinical trials. The current financing is expected to take the firm through Phase II with its lead product, PRTX-001, due to enter human trials next year.

A pre-IND meeting was held with the FDA in July 2002. Over the next 12 months the company will be overseeing the manufacture of PRTX-001 for Phase I and Phase II trials, while designing trial protocols and putting together a bridging study to compare lots used in animal trials with the product that will be administered in human clinical trials.

The company's contract laboratory in Europe, Eurogentec SA, of Liege, Belgium, is scheduled to produce an early lot of the drug for stability testing this quarter, and a final lot to be released in first quarter of 2004, in time for the Phase I trials.

Protalex came into being in 1999 and, with six full-time employees, says it is developing compounds based on influencing cellular activities "at a more basic level than traditional pharmaceutical agents."

Most drugs against RA, for example, target products of the immune response that are formed after the system has lost its ability to self-regulate, the company said, whereas Protalex's technology is designed to attack the first pathogenic loss of regulation that leads to the abnormal immune response.

Specifically, the company seeks to "reset" the immune system with a bioregulator, deactivating the response early and preventing activation of lymphoid cells and secretion of pathogenic cytokines. In an animal model, the approach has inhibited the acute inflammation and repaired and/or reversed tissue damage caused by inflammatory response.

Preclinical studies are planned in lupus and Crohn's disease during 2004 and 2005, after significant progress has been made in the RA research.

Chairman of Protalex's board is Kirk Raab, former CEO of South San Francisco-based Genentech Inc.

"He brings a wealth of experience and knowledge, and a lot of resources," Kane said, calling Raab "a roll-up-your-sleeves kind of guy."

Kane noted the company has kept a low profile since its inception and he intends to keep it that way, at least for the time being.

"Our mission is to navigate successfully through the FDA approval process and do the fundamentals," he said. "We're going to let the science and the results do the talking."

The most recent financing was led by vSpring Capital, of Salt Lake City, with participation by Integral Capital Partners, of Menlo Park, Calif., as well as institutional and accredited private investors including current shareholders.

Protalex's stock (OTC BB:PRTX) closed Friday at $5, down 10 cents.