CellGate Inc. closed a $10 million Series D financing and will use the funds to drive through a proof-of-concept Phase IIa study and initiate multicenter Phase II trials with its lead product before expecting to enter Phase III work in 2003.
PsorBan, its topical product for psoriasis, is in a Phase IIa trial now and will begin a Phase II study soon, said CellGate CEO Edward Schnipper.
"[The Series D] was a vote of confidence by our existing backers in the technology and the progress we've made so far," he told BioWorld Today. "We're in the clinic with our lead product. [The Phase IIa trial] has completed enrollment and we will be using that trial to essentially prove the concept and that should allow us to approach the financial market with actual data instead of just a theory."
Including the Series D, the CellGate theory has attracted $40 million to date. Add successful Phase II clinical data to that theory and CellGate will be seeking a sizable next round.
"Now that we're in Phase II, we'll be in Phase III next year, so we'll need additional funding," Schnipper said, adding that the company is planning the round before any Phase III studies start. "We're not sure of the size, but we are thinking something in the order of $30 million. An amount to get us to the point where we are pretty sure we are on a good [new drug application] track."
Privately held CellGate alters existing drugs by chemically combining them with its transporter molecules. Its transporter technology hastens the uptake of a set of molecules, including small, organic molecules, biopolymers and nucleic acids into cells, while retaining biological activity. PsorBan is a conjugate of cyclosporine; CellGate chemically transformed cyclosporine to increase absorption into tissues and cells when applied locally. The company, for now anyway, has a dermatology and oncology focus, although Schnipper, who was named CEO and president in July, said the company would like to get another dermatology product into the clinic next year, perhaps even a third. Beneath that, CellGate has several oncology products in preclinical work. The Series D round should provide the company time and resources to gear up for Phase III studies. (See BioWorld Today, Aug. 19, 2002.)
"We're very pleased that the current investors that know our story well felt comfortable enough to put additional money in so we can get a successful next round," Schnipper said. "It takes the pressure off. It allows us to collate some clinical data and do the next round comfortably."
The round was led by Healthcare Ventures, of Cambridge, Mass., and New Enterprise Associates, of Menlo Park, Calif. Additional investors included Johnson & Johnson Development Corp., of New Brunswick, N.J.