By Karen Young
Avalon Pharmaceuticals Inc. raised $70 million in a Series B round of private equity financing, the third largest private company financing in the U.S. this year, according to BioWorld Snapshots.
Avalon CEO Kenneth Carter said the money will allow the Gaithersburg, Md.-based company to expand some of its internal programs. Since it began doing business in January 2000, Avalon, a genomics-based company focused on the discovery of small-molecule drugs, has focused primarily on colorectal cancer. The additional money will enable the company to turn its attention to prostate, breast and lung cancers.
¿We also have some very early stage drug candidates, and this will allow us to move toward the preclinical process,¿ Carter said.
The funds will be used to establish Avalon¿s second generation of drug discovery, automation and bioinformatics technologies. Avalon identifies markers for disease activity and directly screens for drug effects using multiparameter signatures in complex biological systems.
The company has raised $80 million to date, and this latest round will carry the company forward for a ¿good, solid three years,¿ Carter said.
¿Our next major goal will be to put a large pharmaceutical partnership in place, both to expand some of our discovery processes and to develop some of the drug candidates,¿ Carter said. ¿Right now, our value in the eyes of our investors and the pharmaceutical world is in accelerating the early stages of drug discovery.¿
Although the company has focused exclusively on cancer thus far, Carter said that some of its approaches ¿have the ability to transform the way drug discovery is done across the board.¿
The company has about 50 employees, a number expected to grow with the new financing. Avalon was founded in 1999 by seven people, including Carter.
In April, Avalon entered a collaboration with Compugen Inc., the U.S. arm of Tel Aviv, Israel-based Compugen Ltd., giving Avalon computational skills it needs. The agreement called for the identification and development of drug targets and diagnostic markers. Through this agreement, Avalon licensed Compugen¿s Gencarta annotated genome, transcriptome and proteome database and query tools. Compugen was to receive cash payments of an undisclosed amount and an equity stake in Avalon. Avalon gets rights to develop resulting therapeutic and diagnostic products. (See BioWorld Today, April 4, 2001.)
In January, Avalon and ImmunoGen Inc., of Cambridge, Mass., entered a license agreement to develop antibody-based products based on an undisclosed number of genomic targets delivered by Avalon. ImmunoGen will develop, manufacture and commercialize any resulting products. (See BioWorld Today, Jan. 26, 2001.)
CDP Sofinov, of Montreal, served as lead investor in this latest financing. Other new investors include EuclidSR Partners, of New York; AIG Global Investment Group, of New York; Hambrecht & Quist Capital Management, of Boston; MDS Capital, of Toronto; RBC Capital Partners, of Toronto; GeneChem Inc., of Montreal; OrbiMed Advisors LLC, of New York; and KBL Healthcare Ventures, of New York.
Existing Series A investors that participated in this round included Oxford Bioscience Partners, of Boston; GIMV NV, of Antwerp, Belgium; Forward Ventures, of San Diego; and Emerging Technology Partners LLC, of Rockville, Md.
Array Capital LLC, of Boston, acted as lead placement agent for the financing.
The two bigger financings this year came from Eyetech Pharmaceuticals Inc., of New York, which raised $108.5 million in a Series C round in August, and Perlegen Sciences Inc., a genomics venture formed by Affymetrix Inc., which raised $100 million in April.