Washington Editor

As a small privately held company with 22 employees, GeneSoft Pharmaceuticals Inc. appears to be on a roll, finding its niche in three different areas of drug development.

The company on Friday added $5.5 million in new government funding to it first approval, which it gained a week earlier.

Located in South San Francisco, GeneSoft, in addition is focusing its efforts on two polypeptide deformylase, or PDF, inhibitors, two novel mode-of-action antibiotics. One is in Phase I and the other in the late preclinical stage.

But GeneSoft officials are patting themselves on the back for their first drug approval. Earlier this month GeneSoft received regulatory clearance for Factive (gemifloxacin) for the treatment of mild to moderate community-acquired pneumonia and acute bacterial exacerbation of chronic bronchitis.

David Singer, company chairman and CEO, described the history of Factive, saying it was discovered by a Korean company named LG Life Sciences and licensed to Smith-KlineBeecham plc (SKB), since merged into GlaxoSmithKline plc. While SKB studied it in 10,000 humans in 14 Phase III trials, the FDA rejected the new drug application, prompting SKB to return Factive to LG Life Sciences.

In turn, GeneSoft licensed Factive from LG Life Sciences, and ended up hiring Gary Patou, SKB's senior vice president and director, project and portfolio management. Singer said Patou, who serves as president of GeneSoft, knows Factive "intimately."

"We believed we could get it approved, as did our whole team," Singer said. "We thought it would be an important drug in this area of antibodiotic resistance, and we are pleased with the label because it substantiates our view."

Factive is an oral quinolone that's dosed once a day for five days for bronchitis, and once a day for seven days for pneumonia. "It has a broad spectrum of action, it's the only quinolone that has a dual targeting mechanism of action, and we are tremendously excited about this," Singer said. "We believe Factive could be a significant product and we will definitely launch it before the next flu season, whether that's the end of this year or the beginning of next year."

GeneSoft owns rights in North America and Europe. Company officials are evaluating whether to partner the product.

GeneSoft and the government entered a contract in 1999 focused on developing countermeasures for biological warfare agents such as anthrax, smallpox and malaria.

On Friday, GeneSoft received an additional $5.5 million in its ongoing contract with the Defense Advanced Research Project Agency (DARPA), bringing its total award to $21 million.

Specifically, Singer said GeneSoft is developing SMATs, or small-molecule anti-genomic therapeutics, that target DNA signatures found in biological warfare and bioengineered agents.

"What we have is single agents, which work against a broad spectrum of targets," he said. "Malaria turns out to be a pretty important problem, and it has been for 100 years. Our single agents attack the genetic feature which is shared by the so-called threat pathogens - so it would be one oral small molecule for all three."

The research is in advanced small animal models.

Singer characterized GeneSoft's relationship with the government as "robust," saying if the company is successful in animal models, there's an opportunity for additional funding in human trials.

"It's like pinball - if you win, you get to play again," he said.

In a prepared statement, Rep. Tom Lantos (D-Calif.) said, "It is notable that in the face of tough competition from across the country, GeneSoft Pharmaceuticals successfully secured this significant funding. This further emphasizes the Bay Area's leadership position in biotechnology and California's commitment to our national security interests."

GeneSoft was founded in 1998 on the science of Peter Dervan and others based on chemistry technology licensed from the California Institute of Technology. Since its inception, the company has raised in excess of $60 million.