Drinking from the well of institutional funding, Phytobiotech Inc. closed a second round of financing worth C$17.25 million.

The company, founded in 1997 to develop plant-derived molecules in drug discovery, has raised a total of C$23.3 million (US$14.8 million) to date. The Laval, Quebec-based firm expects the latest round of funds to last for two years - long enough to ready its molecules for preclinical research.

While plant cell derivations aren't the most common source of drug discovery, Western medicine has seen its share of successes spring from plants, such as aspirin, morphine and Taxol, said Richard Gauthier, vice president of corporate development at Phytobiotech. Phytobiotech expects to base its growth on the same initiatives that produced those drugs.

"We're looking at natural product drug discovery, but using plant cell culture," he said. "It's all about plants. We don't do any other natural products."

Phytobiotech's plant cell culture technologies sprang from laboratory research at both the Polytechnic Institute of the University of Montreal and the University of Quebec at Three Rivers. Jean Archambault, a company founder and now its president and CEO, also was a professor at the latter institution.

At the outset, Phytobiotech purchased from the universities the intellectual property upon which the company is based. The company is focusing its early discovery efforts on plant-based molecules that target cancer and infectious disease.

"We've really learned how to understand how plant cells grow and how to make them produce their secondary metabolites that we then extract, purify and get ready for high-throughput screening," Gauthier said.

Based on that technology, the company has developed PurePhytoLib, a library of 80,000 purified phytochemicals. He said the company adds about 1,000 purified phytomolecules per week, so quantity is not an issue as Phytobiotech grows and reproduces cells within its reactors.

"With our technology platform, we do all of the heavy work up front prior to the screening," Gauthier said. "Once the screening is done, all we have to do is go back to that well and purify more of that molecule to get its structure."

Phytobiotech is focused on internal drug discovery for its first two targets, but also plans to out-license compounds in exchange for some portion of marketing rights.

One such collaboration, formed a year ago with Worcester, Mass.-based Microbiotix Inc., seeks to identify and develop antibiotic agents that inhibit bacterial DNA replication. Resultant antibiotics are designed to address the problem of antibiotic-resistant bacterial infections. Phytobiotech has supplied purified, plant-derived small molecules from its library to Microbiotix, which screened the phytochemicals in order to identify compounds that inhibit the DNA polymerases of both Gram-positive and Gram-negative bacterial pathogens.

Gauthier said the 30-employee firm also expects to out-license its compounds for therapeutic purposes outside their original realm. Along with an expected product growth, Phytobiotech plans to expand to about 40 employees by the end of next year.

First-time investors in the company were Montreal-based SGF Sante, Investissement Desjardins and T2C2/BIO 2000. Existing investors also included in the round of financing include Montreal-based Fonds de solidarite FTQ and Innovatech du Grand Montreal, as well as Quebec City-based Fonds Bioalimentaire. Private investors included three groups from Montreal, two from Calgary, Alberta, and one from Toronto.