BioWorld International Correspondent

BORNHEIM, Germany - DeveloGen AG, a functional genomics company aiming at new therapies for obesity and diabetes, raised EUR40 million (US$35.96 million) in its second financing round. The money raised will allow DeveloGen to accelerate additional applications of its integrated technology platform, DeveloScreen, as well as to advance its therapy programs and to implement procedures for further corporate growth, the company said.

DeveloScreen is an integrated in vivo functional genomics platform utilizing the hypothesis that human genes have counterparts in lower organisms. To validate gene functions and thus identify drug targets, DeveloGen uses various methods to induce mutagenesis in fruit flies, zebrafish, chick embryos and mice, and then looks for changes in phenotype after the mutations. The company also looks for naturally occurring mutant populations.

"We search gene functions always from phenotype backward," DeveloGen chief operating officer Edward Stuart told BioWorld International.

A naturally mutated fly population in Africa became a model for human obesity, he said. These insects are obese, have higher mortality rates and are otherwise less fit than non-obese animals of the same species, Stuart explained. "Flying in the wind tunnel, the obese mutants gave up earlier," he said. By inducing mutagenesis, researchers identified a large number of genes for obesity.

"Once a new gene is found, we search our databases for homologues in other model organisms and humans, and then prioritize the genes which have human homologues and are .druggable" for further investigation," Stuart said. Such an investigation may include functional tests in zebrafish, chick embryos and knockout mice, he added.

In the field of diabetes, the company aims at developing therapies to switch on insulin in patients who do not produce their own. The research centers on the PAX-4-gene. "This is the master-control gene to turn stem cells into insulin-producing, pancreatic beta cells," Stuart said.

"We run preclinical tests of ex vivo and in vivo gene therapy routes, aiming at switching differentiation of insulin-producing beta cells on again," he said.

DeveloGen also plans to use the funds to explore further therapeutic areas with its DeveloScreen platform, and hopes to find and optimize lead molecules as potential drugs in partnerships with biotechnology companies, with an aim to drive them as far as possible into Phase I or Phase II clinical trials.

"We want to capture as much value from our projects as realistically possible," Stuart said, adding that more staff will be hired as well. Sixty employees work with DeveloGen, 45 of them at Göttingen headquarters and 15 at a Berlin facility.

Founded in November 1997, DeveloGen's April 1998 seed financing raised DM6 million (US$2.75M) of venture capital, plus DM5 million from Bonn, Germany-based tbg's silent partnership and another DM9 million from government grants.

Dresdner Kleinwort Capital, of London, led the second financing round. New investors include the German firms BdW and CBG Commerz Beteiligungsgesellschaft, both of Frankfurt, and DVC Deutsche Venture Capital, of Munich. Existing investors who supported the financing include Munich-based TVM Techno Venture Management; Global Life Science LP; Industrie Management Holding, of Hannover, Germany; Dansk Kapitalanlaeg, of Copenhagen; and tbg.

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