West Coast Editor
AGY Therapeutics Inc. netted $31.3 million in a Series C financing for its work with small molecules against ischemic stroke and Alzheimer's disease, predicting it will have a product ready for the clinic "toward the second half of next year," said Karoly Nikolich, founder and CEO.
"These are targets that are currently in drug screening, and one program in the brain tumor area is getting ready for therapeutic antibody development," followed by programs in stroke and Alzheimer's disease, he said.
Although the brain tumor effort seems in the lead position, he added, "I have to say that, with a little bit of luck, it could be one of our stroke programs."
Proceeds will help advance candidates AGY-203 and AGY-207 for ischemic stroke and AGY-110 for Alzheimer's disease, as well as pay for ongoing investigation into potential drugs to treat central nervous system (CNS) diseases and for general corporate purposes.
The firm's imAGYne platform analyzes models of CNS disorders and aims to identify new therapeutics that interfere with signaling pathways. AGY is able to make "sequential molecular snapshots" to track gene expression in ischemic damage.
Nikolich said the brain tumor program has particular significance. It began several years ago when venture capitalist and AGY co-founder Robert Swanson was diagnosed with brain cancer. Swanson died two and a half years ago.
The program was established "to analyze first his tumor and then other, related tumors," Nikolich said. "We've just had our first patent allowance on one of our brain tumor targets. It has led to a very exciting program, which is getting into the preclinical phase."
He noted that "all the current drugs that target CNS disease work on a total of 150 brain proteins, and the current estimate is that there are between 5,000 and 10,000 proteins that are potential drug targets in the brain."
AGY continues work in the area, Nikolich said.
"There is still a pipeline that continues to grow, and we have several dozen [protein targets] still in the validation phase," he said.
More than a year ago, the company raised $13 million by placing convertible preferred notes in the second round of a Series B financing, bringing the total amount raised at that point to $24.5 million. (See BioWorld Today, May 8, 2001.)
Times have been hard since then. Nikolich told BioWorld Today the company has been operating with a bridge financing, and already has used some of the money gained through the more recent financing.
On Sept. 13, AGY was to meet with a lead investor from Europe.
"As you can imagine, they never made it here [because of the terrorist attacks of Sept. 11], and that was a major setback," Nikolich said. "Timing was unfortunate, the markets suffered afterward, and the recovery didn't come."
He estimated the company has about $28 million in cash after the financing.
"If nothing else happens, this will last a minimum of two years, but we're expecting some other sources to come along," he said. "We're advancing partnering negotiations, and grant funding is anticipated."
The financing round was led by Bear Stearns Health Innoventures, of New York, and HBM Bioventures Ltd., of Zurich, Switzerland. Additional investors include NIF Ventures, of Tokyo; China Development Industrial Bank, of Taipei; Cheng Xin Venture Capital, of Taipei; MIC Capital LLC, of Tokyo; Lotus Bioscience Ventures Ltd., of Hong Kong; the capital funding group of GE Capital, of New York; and others.
Returning investors are GIMV Venture Capital, of Antwerp, Belgium; Alta Partners, of San Francisco; Forward Ventures, of San Diego; Jafco Co. Ltd., of Palo Alto, Calif.; Lombard Odier, of Geneva; and Novartis Venture Fund, of Basel, Switzerland. The exclusive placement agent and financial adviser for the offering was J.P. Morgan H&Q, of San Francisco.
AGY also appointed to its board Elizabeth Czerepak, founding partner of Bear Stearns Health Innoventures, and Jack Obijeski, investment advisor at HBM.