Agensys Inc. completed a private financing that raised gross proceeds of $42.8 million, funds that will be used for clinical trials of its therapeutic human monoclonal antibody candidates.

The Santa Monica, Calif.-based company began its fund-raising efforts shortly after September 11, said Paul Kanan, vice president, operations and chief financial officer.

“I wouldn’t say it was easy, and I wouldn’t say it was extraordinarily difficult,” Kanan said. “We were fortunate to attract a lot of interest in what we were doing and raised a little bit more money than we had planned.”

The money is expected to last “a number of years,” he said.

“We designed this round to enable us to achieve some very significant milestones,” Kanan said.

More specifically, the company plans to have two of its programs in the clinic within 36 months, said Aya Jakobovits, senior vice president, technology and corporate development, and chief scientific officer for Agensys. Jakobovits previously worked at Abgenix Inc., of Fremont, Calif., and was a leader in developing its XenoMouse technology.

Another use of the money is to establish an antibody production facility, Kanan said, noting that there is a shortage of antibody production facilities. This facility will be used only for internal drug development purposes.

Formerly called UroGenesys Inc. due to its initial focus on urological cancers, the company was founded by a group of executives along with UCLA scientists and oncologists in mid-1997. To date, the company has raised about $62 million.

Jakobovits said Agensys has succeeded in generating a large and diverse portfolio of clinical targets in cancer. These targets are designed to produce fewer and less severe side effects.

“Many of our targets are not expressed in vital organs but are expressed in more than one solid tumor,” she said.

The company has targets for 11 solid tumor cancers, including prostate, kidney, bladder, lung and colon. And the targets lend themselves to more than one therapeutic form, including antibodies, small molecules and vaccines, Jakobovits said.

“One of the strengths of the company is our portfolio of private cancer targets, which have been validated extensively,” Kanan said. “That has been done with a genomics approach carefully applied with a lot of rigor.

“We’ve also developed a proprietary proteomics technology, which we are incorporating into that program,” he said.

Relying on the staff’s scientific and clinical expertise in disease, Agensys’ technology focuses on clinical relevance to identify candidate antigens with an emphasis on patient specimens for discovery and validation. The company’s goal is to identify genes expressed during cancer both at its beginning and as it metastasizes in multiple tumors. It also uses xenograft mouse models representing rare patient specimens from different stages of disease.

Agensys’ research has yielded more than 50 proprietary targets in cancer, Kanan said.

The company’s business model is twofold: to focus on internal discovery and development efforts, which is solely focused on antibody therapy, and to outlicense those preclinical therapeutics that are not selected for clinical development, Jakobovits said.

Agensys already has agreements with two other companies. One five-year collaboration is with Abgenix, which is developing antibodies to 25 Agensys targets, or five targets each year.

A second agreement was signed with Genentech Inc. in July 2000 that could mean up to $33 million for Agensys, and royalties on any product sales. Genentech licensed rights to prostate stem cell antigen, one of Agensys’ targets.

For the financing, JP Morgan H&Q, of San Francisco, acted as the exclusive placement agent and financial adviser. Bear Stearns Health Innoventures, of New York, was the lead investor, with OrbiMed Advisors, of New York, and Alta Partners, of San Francisco, as co-leads.

Other new investors were HBM Partners AG, of Zurich, Switzerland; Hambrecht & Quist Capital Management, of Boston; Carnegie Kapitalforvaltning AB, of Stockholm, Sweden; BSI AG, of London; and ReqMed Company Ltd., of Tokyo.