BioWorld International Correspondent

BORNHEIM, Germany - Graffinity Pharmaceutical Design GmbH, of Heidelberg, Germany, has completed its second financing round, raising EUR30.6 million (US$27.45 million).

With the proceeds, Graffinity plans to make its chemical microarray platform for early stages of drug discovery grow to an industrial scale, thus improving market penetration, especially in the U.S., Graffinity CEO Dirk Vetter told BioWorld International.

The company calls its technology rapid array-informed structure evolution (RAISE). Vetter said he expects it to make the first steps of drug discovery smarter, cheaper and easier.

"We believe that drug discovery chemistry needs a new impulse," he said.

RAISE works on gold-coated chips. Minimal amounts of small molecules are bound to the surface of the chip. To find out whether a potential drug spotted on the gold interferes with a drug target, chemists add the target or the target's domain to the spot on the chip, rather than dropping the substance into hundreds of thousands of target-containing wells, as has been done until now with high-throughput screening.

"Binding of a protein to the small molecule on our chips changes the gold electrons" oscillation in the metal grid, and such a change is called surface plasmon resonance," Vetter explained, adding that the resonance gives a detectable light signal. "There is no further labeling necessary," he said.

Bringing the target to the library on the chip means the reagents cost less, there are fewer proteins to be prepared, and biological testing requires less logistical effort.

"RAISE competes with initial high-throughput screening in initial stages of drug discovery, when chemists search for molecules worth being optimized into lead structures," he said, adding that the technology "makes this process about 100-fold faster."

Graffinity also generates the small molecules for its chemical libraries by miniaturized synthesis methods. The company aims to raise revenues by collaborating with biotechnology firms, gaining validated targets and discovering drugs against the targets.

Currently, the company raises revenues from cooperations with pharmaceutical companies American Diagnostica, of Greenwich, Conn.; the former Knoll/BASF Pharma (now a branch of Abbott Laboratories, of Abbott Park, Ill.), of Ludwigshafen, Germany; and Boehringer Ingelheim, of Ingelheim, Germany.

The company recently moved into a new 2,000-square-meter building.

"That's room enough for development [and] for staff and technical infrastructure to grow into," Vetter said. Graffinity plans to double its staff from 40 to 80 employees. "We especially want to expand our abilities in chemistry," he said.

Founded in November 1997, Graffinity raised DM10 million (US$4.58M) in a seed financing in August 1998. The syndicate of investors in the second financing round was led by Merlin Biosciences , and includes Oxford Bioscience Partners, of Boston; The Dow Chemical Co., of Midland, Minn.; GIMV, of Antwerp, Belgium; TechnoStart, of Ludwigsburg, Germany; 3i Group plc, of London; Heidelberg Innovation, of Heidelberg, Germany; and tbg, of Bonn, Germany.

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