BioWorld International Correspondent
Direvo Biotech AG raised €10.5 million in a second round of private equity financing and will use the capital for growth and to accelerate development of its screening-based technologies for directed evolution.
Danisco Venture, of Copenhagen, Denmark, and Techno Venture Management (TVM), of Munich, Germany, led the investment round. Other investors included SK Kapitalbeteiligungsgesellschaft Köln mbH, of Cologne, Germany; Sanders Morris Harris, of New York; private individuals and existing investors from Direvo's first round of financing. That initial round raised €8.75 million. The German state of North Rhine-Westphalia also granted the company €5 million in support.
Direvo, also of Cologne, was founded in 2000 and specializes in screening-based directed evolution. It applies its technology to biopharmaceuticals, industrial enzymes, biological catalysts and enzymes for the food and feed sectors. The company has ongoing collaborations with Danisco A/S, of Copenhagen; Evotec OAI, of Hamburg, Germany; and Novozymes A/S, also of Copenhagen.
"We think our success in the second round is a matter of having taken care in the first round to have a very strong VC investor with TVM," Andre Koltermann, CEO of Direvo, told BioWorld International. "Another reason is that we have fulfilled the expected milestones over the last two years. Investors also think that our internal product development looks very promising."
Difficult market conditions for venture funding in Germany did not affect Direvo's efforts, he said.
"What impressed people was that we had effectively jump-started the process," Koltermann said. "We began with relatively mature technologies - our detection and screening processes were already mature when the company was founded, and we have achieved a high level of operations quite early."
Although the company works with customers and projects in a broad set of fields, Koltermann said there are commonalities in the work that give Direvo advantages. The company's screening-based platform gives it access to many different molecular functions.
"The task is to adapt the assay," he said. "We work to improve molecular functions, which then give improved performance such as higher catalytic efficacy or greater stability." He also said that the company has a competitive advantage in its technologies for variation and recombination of genes, and in its ability to develop application-relevant assays.
Koltermann said Direvo is able to accurately display the environment in which a target protein will be active. Combined with screening, the accuracy allows the company to develop assays that are more sophisticated, which in turn yields better protein optimization.
The company was earning revenues from its collaborations before the completion of the financing round. Additional potential collaborations also are being negotiated. Koltermann expects that the current round of capital, along with Direvo's earnings, will be sufficient for the company to operate for several years. He declined to say whether the company is currently profitable, or when it might reach profitability.