Biovitrum AB, Sweden¿s newest biotechnology company, came into being at the beginning of the month with 400 scientific employees and a research budget of US$70 million per year. These measures place the Stockholm-based company among the top five independent European biotechnology companies, according to its senior vice president for research, Johan Kordel.

Biovitrum is a spin-off from Pharmacia Corp., of Peapack, N.J., which has retained approximately one-third of its equity. The company, which has some 900 employees in total, has raised SEK1.2 billion (US$115 million) in equity financing from a group of investors led by Nordic Capital and MPM Capital. H&B Capital, NextGear, Carnegie Asset Management, MPM BioEquities, ABN AMRO Ventures and Karolinska Investment also participated in the deal, which is valued at SEK1.5 billion in total.

The company is funded to beyond its break-even point, according to Kordel. ¿The intention is to go through an IPO two to four years from now,¿ he told BioWorld International.

Biovitrum has inherited three businesses from its former parent: Pharmacia¿s metabolic diseases R&D unit, which is focused on small-molecule drug discovery and development; a biopharmaceutical development unit; and a blood fractionation business. The biopharmaceutical development group provides contract protein manufacturing and additional services in areas such as registration and filing with regulatory authorities. It manufactures the hemophilia treatment Refacto, originally developed by Pharmacia and now owned by American Home Products Corp., of Madison, N.J. This provides Biovitrum with a significant royalty and income stream. ¿It is paying for more than half of our burn rate,¿ Kordel said.

Biovitrum aims to link the biopharmaceutical development group with its own target discovery efforts. At the moment, however, the latter activities are confined to small-molecule drug development. Its lead candidate, a 5HT2c receptor agonist that acts as an appetite suppressor, is currently entering double-blind, placebo-controlled Phase IIa trials in obese patients. The first doses will be administered in the third quarter, Kordel said.

Its second drug candidate, which is aimed at Type II diabetes mellitus, is expected to enter Phase I trials in the fall. The company is keeping the details under wraps. Kordel described the molecule as a ¿blood glucose-lowering agent¿ that acts via ¿a novel mechanism.¿

The company¿s third drug development program also is focused on obesity and appetite suppression, although it has not yet disclosed the target. This is currently at the lead-selection stage. Kordel said he expects the program to enter the clinic late next year.

Biovitrum¿s extensive pharmaceutical industry background, which encompasses drug development, registration and global marketing, offers considerable advantages, Kordel said. ¿We are not talking about three professors in a garage,¿ he said.

Its scientists were responsible for developing four of Pharmacia¿s 10 most strategically important drugs, according to Kordel, including Genotropin, which recently received orphan status from the FDA for long-term treatment of growth failure in children. ¿But it will only become an advantage if we can merge that culture with a biotechnology culture,¿ he said.