By Karen Young

Merix Bioscience Inc. secured $39.5 million in a second round of private financing to further develop its individualized cancer vaccines.

The financing was co-led by Sofinov and Techno Venture Management and included new and previous investors. The company, founded in 1997, has raised $42 million to date and thus far has focused primarily on developing cancer vaccines using the body¿s own immune system.

Merix President and CEO Mark Weedon, who joined the Durham, N.C., company in January, said, ¿I think we had a high level of enthusiasm, and I think we could have raised more money if we had wanted to.¿

Merix¿s platform is based on immunostimulation of dendritic cells by exposing them to messenger RNA, part of the critical genetic material of the target to which an immune response is desired. The company said its technology offers a unique and proprietary ability to produce a nearly limitless supply of individualized vaccine for potentially every cancer patient.

The technology was discovered by Eli Gilboa of Duke University, where he is currently director of the Center for Genetic and Cellular Therapies at Duke University Medical Center. Gilboa is chairman of the scientific advisory board and a director of Merix, as well as the company¿s acting chief scientific officer.

The financing should take the company to late 2003 or 2004 and allow it to proceed with multiple Phase II and possibly Phase III trials, Weedon said. The money is expected to allow Merix to acquire additional capabilities and intellectual property and to develop programs in the areas of dendritic cell and antigen loading; complete the remaining 10,000 square feet of the company¿s 20,000-square-foot facility in Durham; continue adding managers; establish a European presence; and complete corporate collaborations.

In the next 12 to 18 months, Weedon said the company hopes to collaborate with a major biotech or pharmaceutical company, mainly in the cancer vaccine area, but also in the area of infectious disease and autoimmunity, including hepatitis C and HIV.

¿We¿re looking to work out some programs there and have started discussions with key experts in these areas,¿ Weedon said. The company recently hired a vice president of business development and will be focusing effort in this area.

Weedon said the current facilities Merix occupies and that are being completed should meet its requirements for the next three years. The company currently has 25 employees, most of them added this year.

¿We now have 10,000 square feet to be fitting out for the clinical trials that we expect to begin in the next three to six months,¿ Weedon said.

Weedon said that much of the company¿s activity until January was completing investigator trials at Duke. It was the encouraging results of those trials, which involved 50 patients, that generated the enthusiasm for this second round of financing, he said.

New investors included ABN Amro Ventures BV, GeneChem Therapeutics Venture Fund LP, Oakwood Medical Investors, Pacific Horizon Partners, Sanders Morris Harris Inc., SHV Ventures and TFG Venture Capital AG & Co. KgaA.

All previous investors participated as well. They included Aurora Funds Ventures, BD Ventures (Becton Dickinson), Cordova Ventures, Harbinger/Aurora Ventures, Intersouth Partners, MDS Capital and Senmed Medical Ventures.

Merix also appointed three new members to its board of directors: Luc Marengere, partner of Sofinov; Hubert Birner, principal with TVM; and Phil Tracy, partner at Intersouth, which is the largest investor in Merix.