BioWorld International Correspondent
MUNICH, Germany - Cenix BioScience GmbH, a privately held start-up specializing in RNA-mediated interference (RNAi) technologies and therapeutics, closed a €5 million financing round.
The Dresden-based company plans to use the financing to continue developing its RNAi technology as a platform for screening potential drug targets and to build a product-oriented division that will bring specific targets to market.
"Our team and our technology helped us to close this round in a difficult market," Christophe Echeverri, Cenix's CEO, chief scientific officer and one of its founders, told BioWorld International. "RNAi is one of the hottest technologies in biotech today, and the nice thing for us is that we got into this technology very early."
The company was founded in 1999 as a spinout from the Max Planck Institute of Molecular Cell Biology and Genetics in Dresden and the European Molecular Biology Laboratory in Heidelberg. Since its founding, the company has concentrated on establishing RNAi-based applications, such as high-throughput genome-wide screening to high-content analyses of gene functions.
Echeverri, a French-Canadian who came to Dresden with the Max Planck Institute, said, "We said that if the technology works as well as we think it should, two things should be true: First, it should be applicable genome-wide and lead to a new screening method, and second, it should work in vertebrates and humans," in addition to the invertebrates in which the concept originally was scientifically demonstrated.
RNAi silences pathological genes by using complementary double-stranded RNA (dsRNA). Because dsRNA is recognized by cells as foreign material, they degrade any messenger RNA containing the dsRNA's sequence, thereby silencing the corresponding gene. One important characteristic of RNAi is its strong experimental reproducibility, which the company said compares very favorably to antisense approaches.
Although RNAi's applicability to humans was not proved when Cenix was founded, academic work has since shown that the method works in humans. Echeverri said that this development has strongly increased interest in the company. "Basically, our risks paid off," he added.
The investment round was led by two new investors, EMBL Technology Fund, in Heidelberg, and BankInvest Biomedical Venture, in Copenhagen, Denmark. The existing investors, TechnoStart, of Ludwigsburg, and Heidelberg Innovation, also participated in the round.
"We're calling this our Ib round of financing," Echeverri said. Cenix closed €2 million of initial financing in September 2000, along with a government-supported investment of €1.5 million. Since then, the company also has won €3 million in research grants from the German government.
Another key factor, Echeverri said, is that the company's business model is very balanced. "The RNAi platform will yield early and mid-term revenues. These may not be extremely high, but they will be solid. This will keep our cash burn down. Our product-based business is a long-term prospect. The platform will generate a pipeline of prospective targets and revenue simultaneously. We do not have to put all of our eggs in one basket. The result is a business model that brings in revenue at all stages of the company's development."
Echeverri said that Cenix will use the financing to set up two divisions within the company: one for platform exploitation and the other to develop RNAi products for specific indications. The company initially will focus on broad cancer indications, such as anti-proliferatives and angiogenesis.
"We will be opportunistic in this field," he said. The company is in negotiations with several partners for target validation deals. Echeverri said he expects the first of these to close "in the next few months."
While the historic floods in Dresden this summer forced the company to suspend operations for a few days as staff helped defend the city from rising water on the Elbe River, its facilities were not affected by the disaster. "Dresdners are tough," Echeverri said.