BORNHEIM, Germany ¿ Jerini AG, in its second financing round, raised EUR20 million (US$17.7 million).

¿We will use the proceeds to accelerate the transformation of Jerini into a drug discovery and development company,¿ Jerini¿s CEO, Jens Schneider-Mergener, told BioWorld International.

Berlin-based Jerini considers peptides to be powerful potential drugs. Jerini developed a proprietary technology platform for the generation of libraries of peptides and peptidomimetic molecules, with such libraries available in chip format in the size of microscope slides.

¿We do screen these peptidomimetic libraries with protein targets such as kinases, proteases or phosphatases, which are very important target families for drug discovery,¿ Schneider-Mergener said.

Jerini is a leader in peptide chip technology, which significantly speeds up the drug discovery process, Schneider-Mergener said. The chips allow for screening of several thousand compounds simultaneously, he explained.

The firm¿s approach to drug discovery is to transform peptides into drug compounds. ¿Sometimes we end up with a small peptidomimetic, which is OK for some indications, but sometimes we must go further on and transform this peptide lead structure into a small organic molecule,¿ Schneider-Mergener said.

Jerini in its in-house program has identified several lead candidates for applications in cancer and rheumatoid arthritis, he added. Further details were not disclosed.

Last week Jerini entered into a product development and licensing agreement for Aventis SA¿s compound Icabitant, a synthetic decapeptide similar to bradykinin but containing 5 non-proteinogenic amino acids. It is the most potent bradykinin receptor B2 antagonist reported so far, Jerini said, adding that Icabitant has virtually the same affinity to bradykinin receptors as bradykinin itself. Previous studies showed an excellent safety profile, he added.

Jerini plans to develop and commercialize Icabitant for treatment of decompensated liver cirrhosis/hepatorenal syndrome, a very late stage of liver cirrhosis. Aventis supplies the compound for clinical trials and may receive milestone payments and royalties.

Icabitant is expected to enter Phase I trials this month, and Phase II studies in mid-2002. If clinical trials are positive, Jerini plans to replace Icatibant with an orally available small molecule, Schneider-Mergener said.

¿In the 1990s, peptides were a red flag for the pharmaceutical industry,¿ he said. ¿Pharmaceutical companies built up capacities to screen chemical libraries for small molecule compounds. They weren¿t focusing on peptides. But small compounds may address certain classes of targets only. On the other side, the biotech companies were coming up with antibodies, which in principle could address any protein wanted. But antibodies are too large to penetrate cells and therefore limited in their applications.¿

Peptides, he noted, ¿are a class of molecules that is in between the huge antibodies and small organic molecules. With peptides, peptidomimetics and derived organic molecules we can in principle address any protein target, especially difficult protein targets that cannot be addressed with antibodies or small organic molecules.¿

Jerini was founded in 1994. ¿[In the beginning], there was no venture capital involved. We started the company with smaller research collaborations with the pharmaceutical industry and fee-for-service projects,¿ he said. Jerini¿s first customers from the pharmaceutical industry included Schering AG, of Berlin, and the former Boehringer Mannheim GmbH, of Mannheim.

¿In 1999 we realized that we had developed a really robust technology, which can be used for drug discovery, [and] at this point, Jerini decided to become a drug discovery company,¿ Schneider-Mergener said. In January 2000, Jerini raised EUR4.5 million in its first financing round. Investors were Berlin-based venture capital firms IBB Beteiligungsgesellschaft mbH and BMP AG, as well as Bonn-based tbg.

Jerini sells its peptide and peptidomimetics arrays to pharmaceutical companies or collaborates with them in the drug discovery area. Jerini¿s industry partners include Schering; Bayer AG, of Leverkusen; Boehringer Ingelheim, of Ingelheim; Monsanto/Pharmacia Corp., of Peapack, N.J.; Procter & Gamble, of Cincinnati; and Genentech Inc., of South San Francisco.

The current financing round was jointly led by TVM Techno Venture Management, of Munich; 3i, of London; and PolyTechnos Funds, of Munich. Further participants are Sanders Morris Harris¿ LifeSciences Opportunity Fund, of New York, as well as Jerini¿s previous investors IBB Beteiligungsgesellschaft and tbg, Jerini said.

The company employs a staff of 82.