By Randall Osborne
West Coast Editor
You can learn a lot by watching ¿ that is, by watching molecules, proteins and cells interact ¿ and investors saw enough in the methods of Signature BioScience Inc. to give the company $43 million in a self-managed private placement, its fourth round of financing.
There¿s more to come, said Mark McDade, CEO of Hayward, Calif.-based Signature. Talks are under way for a deal with an instrumentation company and the acquisition of another firm ¿so we can build more quickly into the drug discovery area,¿ McDade told BioWorld Today. Those transactions are likely to happen in the third and fourth quarters of this year, respectively, he said.
¿Each year, we plan to make a couple of biotech and a couple of pharmaceutical collaborations,¿ he said, in which Signature is supplied with targets or compounds, and ¿we will provide back the data that can aid in selecting a lead compound.¿
Signature deploys methods pioneered by the telecommunications and computer-chip industries in its WaveScreen technology, which involves microwave spectrometry ¿ called multipole coupling ¿ to determine ¿signatures¿ of proteins or of their interactions with small molecules.
¿You beam a signal onto either a protein or a cell, and the reflected signal back, independent of additives, gives you a controlled readout,¿ McDade said. ¿You add a small molecule, place it on the target, and if there¿s an interaction ¿ a change in the structure of the protein ¿ then you¿ll see a difference in the signature.¿
The approach provides important guidance at every stage of drug discovery: hit-to-lead screening, lead optimization and toxicity studies.
¿We have absolutely rock-solid, sole intellectual property,¿ McDade said.
Signature¿s new money, which brings to $64 million-plus the amount raised by the firm since it began in 1998, will go toward acquiring novel targets and chemical libraries, as well as expanding the firm¿s infrastructure to gear up for internal efforts and make ready for partnerships. Last fall, Signature raised $17 million in a Series C private funding round. (See BioWorld Today, Sept. 7, 2000.)
¿By the time our instrumentation partner is capable of launching a commercially sophisticated machine, one that doesn¿t require three engineers tagging along with it, we expect to have morphed into being able to generate our own targets, and we will have built infrastructure sufficiently that we have our own compound libraries as well,¿ McDade said.
¿Then, our deals will look more like the classic bigger deals that Vertex [Pharmaceuticals Inc., of Cambridge, Mass.] or Millennium [Pharmaceuticals Inc., also of Cambridge] does,¿ he added.
Signature previously touted PhenoDynamic profiling, a platform different from WaveScreen but with the same underlying technology. ¿PhenoDynamic profiling¿ was ¿a goofy trademark¿ that has been abandoned, McDade said.
Leading the latest round was SG Capital Partners, of New York. Existing investors who participated include Prospect Venture Partners LP, of Palo Alto, Calif.; Atlas Ventures, of Boston; Abingworth Management Ltd., of Palo Alto; CIBC Capital Partners, of New York; and Coral Ventures, of Minneapolis. New investors included SG Capital Partners; Vulcan Ventures Inc., of Seattle; MDS Capital Corp., of Toronto; China Development Industrial Bank, of Taiwan; Tallwood Venture Capital, of Palo Alto; Lehman Brothers, of New York; Lotus Bioscience Ventures Ltd., of Taiwan; and IRR, of New York.