BioWorld International Correspondent
Swiss biotechnology firm ESBATech AG closed its first major funding round, six months after originally disclosing the investment.
The Zurich-based firm raised a total of CHF10.5 million (US$6.5 million) from a consortium led by Lombard Odier & Cie, of Geneva. The other participants included its seed investor, the Novartis Venture Fund, of Basel, Switzerland; HBM BioVentures AG, of Baar, Switzerland; the New Biomedical Frontiers Fund of BSI SA, of Lugano, Switzerland; and entrepreneur Peter Ohnemus.
The deal was done in two phases, company spokeswoman Kirsten Mundt told BioWorld International. In between, the company underwent a U.S. intellectual property review, at the behest of its lead investor, in order to ensure that its position with respect to its intracellular antibody platform technology was protected.
ESBATech, which was spun off from the Institute of Molecular Biology at the University of Zurich in 1998, is developing yeast cell assays that enable it to study interactions between targets and drug candidates in vivo. "We do it in the cell, in the physiologically relevant location," Mundt said. It couples the molecular components of interest to "readout" systems, including the lac Z gene and cell growth, to enable it to pinpoint potential lead compounds. The company's business model is based on internal drug discovery and doing preclinical research for pharmaceutical firms.
"We are not targeting specific disease areas, but specific biological activities," Mundt said. At present, ESBATech's main focus is on protease enzymes. Its lead program is based on the search for inhibitors of beta-site amyloid precursor protein-cleaving enzyme (BACE), which is linked to the development of the plaques that are characteristic of Alzheimer's disease. The company is building a small compound library, Mundt said, but it also is looking to gain access to larger collections of molecules via partnerships with pharmaceutical firms.
Its knowledge of protease biology could be applied to a broad range of other disease areas, including viral infection and CNS disorders, but the company has not yet decided which additional indications it will pursue. The same platform also could be used to find substrates that act on orphan proteases, whose biological functions are not understood.
The company's second main technology platform, the intrabody program, is based on a proprietary method for selecting antibodies that are stable within the intracellular environment. They can be used in protein domain knockout studies for target validation. In combination with gene therapy, the technology also has therapeutic potential, Mundt said.
ESBATech currently employs 25 people. This figure could double by the year's end, Mundt said, depending on the company's progress in securing research assignments from pharmaceutical firms. On Monday, it named Pedro Raiser, formerly president and CEO of Novartis Pharma Japan, as its new chairman.