BioWorld International Correspondent

LONDON - Ardana Bioscience Ltd. raised £20 million (US$32.4 million) in the largest second-round funding in Europe to date this year, a financing designed to enable the reproductive health specialist to launch its first product in 2004, buy a near-market product for launch in 2005 and advance five products to Phase III.

CEO Simon Best told BioWorld International the fund-raising "was a painful process, but it is a good result, which means we can fully implement what we want to do in the next couple of years."

The round was led by Techno Venture Management (TVM) of Munich, Germany. ISIS Equity Partners plc, a mainstream institutional investor, participated for the first time, and the five existing shareholders, Merlin Biosciences Fund II, MVM Ltd., ABN Amro Capital, 3i plc and Green Highlander LLC, all increased their stake.

The funding gives Ardana the wherewithal to launch Striant, a testosterone patch for the treatment of male hypogonadism, in 2004. The product will be launched in the U.S. in September, by Ardana's partner, Columbia Laboratories Inc., but it is still under review in Europe, and so the exact timetable for launch is in the hands of regulators. However, Edinburgh-based Ardana is putting the sales and marketing infrastructure in place, and is in the process of appointing a sales and marketing director. Ardana acquired the European rights to Striant in October 2002 in an $8 million deal.

"Striant won't move us into profitability on the timescale of this fund-raising because it will take more than two years to get fully established," Best said. "We need to get a couple more products on the market." He plans to license in a near-market product for launch in 2005 and is in advanced negotiations to acquire one. Ardana also is aiming to bring in revenues from outlicensing and partnering noncore products within the next two years.

Ardana was spun out of the Medical Research Council's (MRC) Human Reproductive Sciences Unit in July 2000 and previously raised £14.6 million. In July 2002 it acquired Europeptides GEIE, of Paris, for €28 million, bringing in two products in clinical trials.

All the programs based on MRC research remain at the preclinical stage, but Best said some of the new money will be devoted to accelerating preclinical development. "The preclinical [portfolio] is progressing very nicely, but it is not what brings money into biotechnology companies in the present environment. The MRC understands what the market is like at the moment." There are currently five druggable targets and Best said the new money will allow Ardana to take three of them into chemistry. Ardana's exclusive deal with the MRC has two more years to run.

Ardana also will consider making acquisitions. "We have brought in further muscle with TVM, and with ISIS we have started to pull in institutions. We are certainly looking [at potential acquisitions] with the support of the investor group, but we have a lot on our plate and don't want to be distracted."