Coley Pharmaceutical Group Inc. secured $35 million in private financing to fund further development of its clinical pipeline.
The Wellesley, Mass.-based company initially closed $30 million in the placement, with a $5 million tranche expected to close in the next month.
"Market conditions are not so good in the private equity sector, but I think [our financing stems from] a combination of reasons," Coley President and CEO Robert Bratzler told BioWorld Today. "We are a later-stage, product-focused company, with products in Phase II and the potential to have our lead oncology product in Phase III next year. Secondly, we're not a single-product company - we have products not only for oncology, but also for the treatment of viral diseases and with our partner, Aventis, for allergic rhinitis and allergic asthma. And thirdly, we're in a hot space as we think we're leading the field in using newfound knowledge of how to regulate, control and manipulate the immune system to develop brand new drugs."
Including the most recent money, the company has raised $115 million through five rounds to date. Bratzler said the latest financing would last into 2005.
Coley plans to use the funding to continue to develop ProMune, its lead anticancer compound. The injectable product is in a randomized, controlled, multicenter Phase II trial for non-small-cell lung cancer, and Coley also expects to move it into a similarly structured Phase II trial for melanoma. ProMune is being studied in multiple cancer indications as both a monotherapy and combination therapy.
"Our drug stimulates the immune system in a very specific way to recognize cancerous cells - breast cancer cells, melanoma cells - in principle, any abnormal or rogue cell," Bratzler said. "In animal models, we have tested the drug successfully in 15 different cancers and have shown it to have remarkable curative properties. We know it works independent of which cancer."
The product is based on Coley's technology related to CpG oligonucleotides, a family of molecules that mimics the immunostimulatory properties of bacterial DNA. ProMune targets toll-like receptor 9 (TLR9), which is found in two immune cells, plasma cytoid dendritic cells and B cells. Bratzler said plasma cytoid dendritic cells detect early signs of pathogen invasion and trigger an innate immune system response, at the same time uncovering previously undetected cancer cells. As the dendritic cells mature, they drive the tumor-specific properties of T cells and B cells.
"In cancer, our drug has the potential of helping eradicate the tumor, and in the long term prevent the recurrence of the disease," Bratzler said, noting that initial indications for ProMune are based on preclinical findings pointing to the greatest probability of success. Following such studies, the company may look to clinical studies in other cancers as well, perhaps in partnership, he said.
Coley also expects the proceeds to fund its initial clinical studies of CpG 10101, its lead antiviral drug candidate for hepatitis C scheduled to enter the clinic later this year. The product is designed to induce the production of indigenous interferon-alpha.
"We can use our drugs to drive immune responses to overcome chronic viral infections," Bratzler said. "We get the body to produce, in a very coordinated, concerted and comprehensive fashion, the antiviral chemokines and cytokines that normally would prevent a viral infection but don't in a chronically infected host."
Besides its internal development programs, Coley has licensed rights to its technology to a pair of pharmaceutical partners, collaborations it said validates its work in the CpG oligonucleotide space.
Late last year, London-based GlaxoSmithKline plc gained a worldwide, nonexclusive license to Coley's CpG immunostimulatory oligonucleotides, such as CpG 7909 for use as cancer vaccine adjuvants. The companies' relationship dates further back, to early 2000, when Coley licensed worldwide, co-exclusive rights to CpG compounds for use in certain therapeutic and prophylactic vaccines for infectious diseases. (See BioWorld Today, Jan. 19, 2000, and Nov. 19, 2002.)
Coley's technology also is licensed to Frankfurt, Germany-based Aventis Pharma AG, a relationship through which Aventis has developed an asthma product called CpG 7279. In addition to the lead candidate, which Bratzler said could enter the clinic next year, Aventis is using the technology to develop products for allergic rhinitis as well. (See BioWorld Today, Aug. 7, 2001.)
The company also has partnered with the government to develop CpG immunostimulatory TLR9 agonists to enhance anthrax vaccines. The U.S. Defense Advanced Research Projects Agency has awarded $12 million to the company toward efforts for an adjuvant that could reduce dosing schedules for the vaccine, improve its protective qualities and help stretch its stock.
Two new investors participated in the financing, which was led by Thomas, McNerney & Partners, with offices in New York, Minneapolis and San Francisco, and included Venrock Associates, of New York. Returning investors included two Munich, Germany-based firms, Techno Venture Management and Global Life Science Ventures.
In conjunction with the financing, three investor representatives joined Coley's board - Thomas, McNerney's James Thomas, Venrock's Anthony Evnin and JSB Partners' Christoph Schroder.