Achillion Pharmaceuticals Inc. raised $41 million in a private round of financing that its CEO expects will allow it to take its lead anti-infective compound through Phase II trials and into Phase III before year’s end.
The drug candidate for hepatitis B and HIV, beta-L-Fd4C, is an L-nucleoside that has demonstrated clinical proof of principle in Phase I trials for hepatitis B, Achillion CEO William Rice said.
The privately held company, based in New Haven, Conn., has raised $65 million since its founding less than two years ago. It began with seed money of $250,000, followed by $24 million in funding in March 2000. Rice said the new funding should take the company through the second quarter of 2003. The group of investors was led by SG Capital Partners LLC and Bear Stearns Health Innoventures LP, both of New York.
“We are delighted with the outcome,” Rice said.
Despite the infusion, Rice noted that it was a “challenging” financing environment. Originally, this round was scheduled to close Sept. 17, but many of the company’s potential investors were directly affected by the events of September 11, he said, resulting in its postponement.
Achillion is betting a lot on beta-L-Fd4C. Before the year is out, Rice expects to have proof of principle against HIV, the wild-type forms of HIV and HBV, as well as lamivudine-resistant forms of both viruses.
In addition, Achillion has a second compound that is about to move into preclinical studies from its internal drug discovery program, using its zinc finger targeting (ZFT) discovery platform. ZFT incorporates novel target identification, high-speed chemical synthesis and high-throughput screening. Zinc fingers, or atoms, serve as the glue that attracts certain types of amino acids, pulling them together to form finger-like loops of the protein chain. Zinc fingers are required for virus replication in HIV.
“We’ve now discovered and optimized zinc finger inhibitors that inhibit HIV and that are moving into preclinical development,” Rice said. “The reason we are trying to target the zinc finger of HIV is that it’s a very stable functional structure, or element. The greatest issue is the emergence of drug resistance.”
Rice said HIV mutates and becomes resistant, so his company began searching for a structure that did not mutate rapidly. If it’s difficult to mutate, then it’s difficult to become drug resistant. This preclinical compound has demonstrated proof of principle in an animal model.
“We’ve observed dose-dependent inhibition of virus replication at nontoxic levels,” Rice said. “That not only validates the zinc finger as a drug target, but it also validates the technology with in vivo proof of principle, and we achieved this is less than one year.”
Achillion plans to use the zinc finger technology with other viruses, as well as bacteria and fungi. In its pipeline, the company also has ACH-126,447, or helioxanthin, a small-molecule chemotype that has demonstrated antiviral activity in both hepatitis B and hepatitis C. Another candidate is ACH-126,445, a nucleoside analogue compound that Achillion said is the only known inhibitor of the Epstein-Barr virus. It is in preclinical development to explore the treatment and prevention of post-transplant lymphoproliferative disease.
Other investors who participated in prior financings for Achillion and returned for this round include Atlas Venture, of Boston; Schroder Ventures, of Boston; Advent International, of Boston; and Connecticut Innovations, of Rocky Hill, Conn.
New investors included KBL Healthcare, of New York; ING Furman Selz, of New York; Pacific Growth Equities, of San Francisco; Oakwood Medical, of St. Louis; Webster Financial, of Waterbury, Conn.; and GE Capital, of Norwalk, Conn.