West Coast Editor

Raising $12.6 million at the same time, MacroGenics Inc. acquired Eliance Biotechnology Inc. by way of an undisclosed equity exchange and entered a deal with the University of Texas Southwestern Medical Center at Dallas, which devised technology used by Eliance.

"Financing in these times is big news," said Scott Koenig, president and CEO of Rockville, Md.-based MacroGenics, which is privately held. "We had enough capital to execute on our business plan prior to the acquisition, but for this event, we needed to have more."

With the financing, the company has more than $20 million. "That's projected to last us through next year" with no further fund raisings, Koenig told BioWorld Today. Last fall, MacroGenics completed the second tranche of its Series A financing for $9.5 million, bringing the total raised at that point to $13.5 million. (See BioWorld Today, Sept. 26, 2001.)

Founded in August 2000, MacroGenics has 23 employees (and will add nine more with Eliance) and focuses on immunotherapeutics for cancer and inflammatory diseases. Much of the work involves developing antibodies and testing other companies' antibodies.

"We have a lead molecule, a humanized antibody for autoimmune indications, that we are planning to get into the clinic by the first quarter of 2004," Koenig said.

With the buyout of Eliance comes a focus on infectious disease targets. MacroGenics is gaining the technology to rapidly screen bacteria and viruses that cause human diseases using animal model systems and methods, called Expression Library Immunization and Linear Expression Elements.

"Eliance has a number of candidates still in preclinical stages," Koenig said. "We plan to make some decisions next year about clinical development. There are a number of targets that have already been validated, and through the high-throughput screening process utilized by the group at Eliance, they have a number of promising candidates for human and veterinary pathogens."

He would not be more specific, but said the targets are "of significant medical importance."

Also, he said, "even before the 9/11 horror, [Eliance] had been investigating the applications of the technology for vaccine antigens for some of the bioterrorism pathogens as well," and has set up model systems for testing.

"I think it's too early to tell what the commercial impact will be of identifying targets for the bioterrorism agents," Koenig said. "It will lead to new products that will be useful for the Defense Department as well as general public health. I also see applications to other pathogens that are closely related to the bioterrorism agents. This already has happened to Eliance, in that there are often homologues, proteins that are very similar between and among various species that have been identified to be protective against one pathogen and then turned out to be protective against another."

The deal with the University of Texas Southwestern Medical Center includes establishing a MacroGenics research site in Dallas for infectious disease target identification and development of new methods for genetic immunization.

MacroGenics is licensing a patent portfolio from the medical center related to new vaccine antigens, adjuvants and methods of immunization.

"It's quite considerable," Koenig said. "It includes methods for screening new adjuvants, new targets for vaccines and other technologies. As part of the agreement, we're still in the evaluation process, and we haven't finalized the number we're going to license."

There's also a multiyear-sponsored research agreement with UT Southwestern in the field of immunobiology.

MacroGenics is striving to "create complementary technology at various sites that can be utilized throughout the company," Koenig said. "While there's a certain redundancy you can't avoid, we're trying to eliminate that as much as we can."

In Dallas, the effort will center on vaccine discovery, testing adjuvants and using high-throughput systems for applications of antibody work that MacroGenics is exploring and developing at the other sites for autoimmune and cancer indications.

"There's going to be very close relationship between all the sites," Koenig said, noting MacroGenics' "very intense collaboration" with the Institute for Systems Biology, a nonprofit research center based in Seattle. MacroGenics is working with the institute to identify novel cancer antigens, adjuvants and certain inflammatory disease targets using proteomics and genomics technologies.

Koenig, former vice president of research with MedImmune Inc., said MacroGenics will be adding staff, beefing up to 40 or 50 by year's end.

The financing was led by InterWest Partners, of Menlo Park, Calif., and included investments by MPM Capital, of Cambridge, Mass.; OrbiMed Advisors LLC, of New York; STARTech Early Ventures, of Dallas; Cogene Biotech Ventures, of Houston; Hunt Ventures, of Dallas; and Alexandria Realty Equities, of Pasadena, Calif.