By Chris Delporte
Locus Discovery Inc. raised $28 million in the first closing of its third round of equity financing.
Additionally, the company has the option to raise an additional $12 million as part of the second closing of the round, bringing the total to $40 million. To date, since its founding in September 1999, Locus has raised $76 million.
The company started with $5 million in seed funding, which was split into Series A and B rounds, and raised $42.75 million in its second round in November of last year. (See BioWorld Today, Nov. 29, 2000.)
¿The additional funds will allow us to expand our drug discovery efforts,¿ Nicholas Landekic, president and CEO of Locus, told BioWorld Today. ¿We plan to continue our internal design programs and undertake chemistry and biology efforts in 20 new drug discovery programs over the next six to nine months.¿
The funds also will be used to expand the company¿s pool of talent. Locus currently employs 32 people, but Landekic said that should increase to 50 by the end of the year.
¿We are finishing construction of labs in our new location. Now that we have the space, we need the people to fill it. We may have 70 employees by the end of next year.¿
Blue Bell, Pa.-based Locus Discovery¿s technology is a proprietary means of rapidly and accurately identifying the biologically relevant active binding site of a protein. The process then allows the design of multiple structural classes of small-molecule compounds that act as inhibitors or activators of the protein¿s activity. The technology uses computational chemistry and bioinformatic techniques based on work invented and exclusively licensed from Sarnoff Corp. International, of Princeton, N.J.
The technology requires only the knowledge of the 3-D structure of a protein. Starting with that structure of a protein, Locus rapidly identifies the biologically relevant active binding site of the protein, as well as predicts the chemistries of molecular classes that will effectively bind to that site.
Speed is a large part of what makes the company¿s technology and approach to drug discovery revolutionary, it said. The company said the process takes a few weeks, compared to years for other drug-discovery procedures. Locus Discovery¿s drug discovery programs include small-molecule mimetics of erythropoietin, antiviral compounds based on a novel target called GP41, and other programs in cancer, infectious diseases and neurological and other disorders.
GP41, a novel antiviral target, is a highly conserved structural protein found in many envelope viruses, including HIV, influenza, rhinoviruses and Ebola. A compound that inhibits GP41 assembly potentially could be a useful therapeutic agent for a range of viral diseases. Erythropoietin, a product used in cancer therapy, is a protein that must be administered by intravenous injection. Locus Discovery has synthesized and tested small-molecule mimetics of erythropoietin, which are being designed to enable easy oral administration.
Locus¿ first, and so far only, corporate partnership was formed with Aventis Pharma, the pharmaceutical arm of Aventis SA, of Frankfurt, Germany. The partnership involves developing therapeutic compounds for three protein targets selected by Aventis. Landekic said the targets are confidential, but as far as terms, he said, ¿Locus can earn up to $79 million in milestones for all three targets, plus royalties on sales.¿
This round of financing was led by Wanger Asset Management LP (Acorn Funds), of Chicago, and included new investor ING Furman Selz Capital Management LLC, of New York. Investors returning from previous financings included INVESCO Global Health Sciences Fund, of Denver; Delphi Ventures, of Menlo Park, Calif.; Johnson & Johnson Development Corp., of New Brunswick, N.J.; Tredegar Investments, of Seattle; Prism Venture Partners, of Westwood, Mass.; and Origin Capital, Amerindo Investment Advisers, ReqMed Co. and Cooper Hill Partners LLC, all of New York.