BioWorld International Correspondent

LONDON - Evolutec Ltd. raised £1.8 million (US$2.76 million) in its third-round funding and converted all of its equity into ordinary shares in preparation for a potential listing in the next 12 to 15 months.

In its second round, completed in August 2000, Evolutec raised £2.7 million. CEO David Bloxham told BioWorld International the lower figure for this round reflects a difficult market.

"In an ideal world, we would have wanted to raise more money, but are happy to get away with this," he said. "Valuations are low and existing investors don't want the dilution. In practical terms, for a small company like ours, this is a useful amount."

The money will be spent on reaching clinical proof of principal for the company's lead product, EV131, a protein derived from tick saliva, in the treatment of allergic conjunctivitis. "We can now go full-steam ahead with early clinical development; once we get through that we will be in position to raise more," Bloxham said.

EV131 has completed all preclinical safety trials. The company had a pre-investigational new drug application meeting with the FDA in July, and expects to submit an IND within the next six weeks. That should be in time to start a challenge trial in Boston later this year once the hay fever season has finished. The subjects will be known allergic responders who will be challenged with ragweed pollen.

EV131 is from a new class of compounds, called histocalins, discovered by Evolutec. They bind free histamine and block mast cell degranulation, thus limiting inflammation. The product is expected to be effective in a range of allergic indications, including hay fever. Bloxham said the intention is to license EV131 in all allergic indications once proof of principle in allergic conjunctivitis is confirmed.

Evolutec has identified more than 100 molecules from the saliva of ticks and other arthropods, which it believes have wide therapeutic potential. It expects to a have second candidate ready for the clinic within the next 12 months.

The company, based in Oxford, was set up in September 1998 to commercialize the work of one of the founders, Pat Nuttall, director of the Centre for Ecology and Hydrology at Oxford University. Nuttall's original focus was on the transmission of viruses carried by ticks. Evolutec has a five-year agreement with CEH giving it exclusive rights to develop and exploit Nuttall's work.

Evolutec also is working on animal vaccines against the viral diseases carried by ticks, and agreed to a research collaboration with Novartis Animal Health in November 2000. However, Novartis does not have rights to any products. Evolutec is planning a study in Kenya, assessing a vaccine construct against tick infestation in cattle.