Plexxikon Inc. completed a Series B preferred stock financing, raising $27 million to be used to expand its Scaffold Discovery Factory, which generates multiple scaffolds and drug leads.
Privately held Plexxikon, of Berkeley, Calif., will use the money to expand the platform’s synthetic organic chemistry, crystallography and informatics capabilities. The funds also will allow Plexxikon to expand space by 10,000 square feet to house additional chemistry labs.
“The financing shows the confidence the investment community has in what we’re putting together as a team with the management expertise we’ve assembled and our scientific platform,” CEO Peter Hirth told BioWorld Today.
The money is expected to take the company into 2004, Hirth said, explaining that some potential investors could not be accommodated.
“We actually could have raised more money,” he said, noting that raising money today takes a greater investment of company time than in the past.
“It does really take a lot of effort a lot of due diligence,” he said. “[Venture capitalists] are looking at things much more critically.”
In putting together the syndicate of investors, Hirth said the company was able to meet a “great strategic objective” by gaining a presence with investors in different parts of the world.
The financing was led by Walden International, of San Francisco. New investors included GIMV, of Antwerp, Belgium, and A.M. Pappas, of Research Triangle Park, N.C. Walden’s worldwide presence provides Plexxikon with international reach and access to additional markets, he said.
Returning investors were Alta Partners, of Embarcadero, Calif.; CW Group, of New York; Advanced Technology Ventures, of Boston; and Kumho Group, of Seoul, Korea.
Hirth said Kumho’s significance is that one of Plexxikon’s founders, Sung-Hou Kim, a professor at the University of California at Berkeley, is from Korea and is highly regarded in his home country, generating a great deal of interest from investors there.
“He is a great pioneer in structural biology,” Hirth said.
To date, Plexxikon has raised about $35 million. In March, Hirth told BioWorld Today that he expects the company’s employees to number about 80 by year’s end. (See BioWorld Today, March 14, 2002.)
Plexxikon’s scaffolds are basic chemical structures from which specific drug leads for druggable targets can be developed. It uses bioinformatics tools, high-throughput co-complexing of ligands with proteins, large-scale protein production, high-throughput co-crystallization, use of surrogate proteins and in silico methods, and automated co-structure determination. It is searching for low-molecular-weight scaffolds that act on protein families that share common folds, with kinases one early focus.
Although Hirth already is thinking ahead to the next round of financing, he also wants to gain revenue from collaborative deals with pharmaceutical and biotech companies.
“Right now, we are focusing on using [the technology] to come up with novel compounds that are specific to novel targets,” Hirth said. “[With partners], we would provide them with leads, and then the partner would test the leads.”