BioWorld International Correspondent

PARIS - Diatos SA, which is developing intracellular and intranuclear drug delivery systems using peptide vectors for the treatment of cancer, completed a second funding round in which it raised €6.5 million.

The lead investor was Crédit Lyonnais, and all the existing shareholders of Diatos participated in the financing, namely: Sofinnova Partners, of Paris; GIMV, of Liège, Belgium; InterWest Partners, of Menlo Park, Calif.; AGF Private Equity, of Paris; Société Générale Asset Management, of Paris; and Sopartec, of Louvain-la-Neuve, Belgium.

The individual amounts invested were not disclosed, but the business development manager of Diatos, Pascale Jourdan, told BioWorld International that Sofinnova Partners, the company's founder shareholder, remains its largest. This round brings to €23.5 million the amount Diatos has raised since it was founded in February 1999. It started with seed funding of €1.5 million and in October 2000 completed an initial funding round in which it raised €15.5 million.

Jourdan added that Diatos had not initiated the latest funding round.

"It was our investors who came to us," she said, adding that it was more of an extension of the first round than a second one, since the company had not organized a road show. Diatos now has sufficient funds for at least two years, she said. The company's strategy is to take drug candidates as far as Phase II trials and then to license their further development, regulatory filing and commercialization to corporate partners.

Diatos has developed a technology platform for the intranuclear delivery of antibodies and therapeutic proteins. It uses its Diatos Peptide Vectors (DPV) technology to produce human peptide-based vectors that enter living cells and can deliver large quantities of small molecules, peptides, recombinant proteins, antibodies or polymer-based nanospheres into the cell cytoplasm and nucleus.

In addition, its Tumor Selective Products (TSP) technology is a tetra-peptide sequence that can formulate therapeutic peptides or proteins as prodrugs. The sequence is selectively cleaved when exposed to enzymes released by cancer cells, and as a result the active molecule is delivered directly to tumor cells.

At the outset, the company planned to develop drugs for infectious diseases as well as cancer, but that program is "now on hold," Jourdan said. On the other hand, she confirmed that a Phase I/II trial of the company's lead compound, DTS-101, a peptide vector-based version of the anticancer agent doxorubicin, would start at the end of 2003 or early 2004. The compound has a broad application in oncology, Jourdan said.

The company also is developing a class of cytotoxic drug-based products that will enter preclinical development this year. It is evaluating a number of conventional, off-patent cytotoxic drugs to determine which are most enhanced by its proprietary delivery systems. Diatos also plans to start in vivo proof-of-concept studies in 2003 of an initial batch of TSP-based prodrugs, one of which is tumor necrosis factor alpha, Jourdan said.

She added that Diatos had concluded evaluation agreements with three companies (including two American ones) to evaluate the combination of Diatos' delivery technology with different compounds, including a small-molecule cytotoxic and oligonucleotides, which look "very promising," she said.

Diatos also is engaged in a long-term research collaboration with OctoPlus Technologies BV, of Leiden, the Netherlands, a specialist in polymer-based drug delivery technology, for development of a biodegradable DPV-conjugated nanosphere delivery platform.