BioWorld International Correspondent

MUNICH, Germany - Xerion Pharmaceuticals AG raised €12.3 million in its third round of financing, which it closed this week. The company will use the funding to develop its own therapeutic pipeline, particularly in antibodies and acute cardiovascular diseases.

The round of investment was co-led by Heidelberg Innovation, of Heidelberg, and Nextech Ventures, of Zurich, Switzerland, both of which are investing in Xerion for the first time. Existing investors 3i, Burrill & Co., IKB Venture Capital and BioM AG also participated in the round.

"Our investors have been thrilled about what our technology can provide," Markus Ewert, CEO of Martinsried-based Xerion, told BioWorld International. "It meets an important market need: to provide solidly characterized targets, with a causative relation between function and disease function."

The company's key products are Xcelerate, XCALIbur and X-plore. The applications assist in target identification, deactivating selected proteins in a cell and functional site identification, respectively.

"The plan has always been to progress from technology to a therapeutic pipeline," Ewert said. "All in all, people have been extremely excited about our basic technology and our results so far," and that built investor confidence for moving to the development of therapeutic compounds.

Xerion will base its pipeline on antibodies. Ewert said those compounds are increasingly finding favor in the market and at major pharmaceutical companies, supplementing their traditional interest in small molecules. "In terms of indications," Ewert said, "we are focusing on the mechanisms underlying cancer metastasis." The company will investigate what makes a cell metastasize and try to find ways to inhibit this tendency. "Some proteins that are responsible for invasiveness have been found in several different cancer types. It would be surprising if invasiveness [from different cancers] were caused by different mechanisms," Ewert added.

Acute cardiovascular diseases, such as thrombosis and stroke, will comprise a second line of inquiry for the company. "We want to be able to reach the responsible target with an antibody. Treatment will have to be after the fact, but able to address the condition," he said.

Xerion plans to bring most of its compounds into Phase II testing. Over the medium term, Ewert sees the majority of the company's revenue coming from out-licensing opportunities on targets and compounds that are in clinical or preclinical testing.

The company is not yet profitable, but Ewert said that the target date for profitability is 2005. Xerion was founded in 1998.

Ewert added that the company expects to close additional funding within six months. Some investors were unable to join this round because of timing difficulties, and discussions with them continue. "Persistence has helped us to beat a difficult financing market," Ewert said.