By Brady Huggett

Novazyme Pharmaceuticals Inc. completed a $16 million equity financing through the private placement of Series B preferred stock.

Participating repeat investors included the Perseus-Soros Biopharmaceutical Fund, of New York; HealthCare Ventures, of Princeton, N.J.; and Catalyst Health & Technology Partners, of Boston. Morgan Stanley Dean Witter Equity Funding Inc., of New York, also participated. The company said it would use the funds for development of its lead lysosomal storage disease programs in mucopolysaccharidosis I (MPS I), Pompe disease and Fabry¿s disease.

¿This round of financing is a tremendous vote of confidence in our company, our technology and, most importantly, in our mission of developing the very best medicine and getting it to patients as quickly as possible,¿ John Crowley, president and CEO of Novazyme, told BioWorld Today.

Novazyme, of Oklahoma City, raised $8 million in a Series A round in September, and a total of $11 million for 2000 as a whole. It has raised $27 million since it was founded in 1999. (See BioWorld Today, Sept. 19, 2000.)

A spokesperson for privately held Novazyme said the funding should be enough to carry its two lead products, NZ1001 and NZ1002, through the end of clinical development, barring anything unforeseen or additional requests by the FDA. Also, the spokesperson said the company anticipates its undisclosed burn rate to increase as it begins a serious push to get both products into the clinic by 2002.

Following the Series A financing, company officials said the plan was to get its Pompe disease product, NZ1001, into human trials by mid-2001. But because of positive preclinical results for NZ1002, its product for MPS I, both programs are receiving the company¿s main energies now. Tuesday, Novazyme received orphan drug status for NZ1002.

Novazyme develops biotherapies to treat lysosomal storage disorders, diseases caused by a missing enzyme ¿ a different enzyme in each disease. In cells, the lysosome needs a certain enzyme to break down macromolecules. To treat most lysosomal storage diseases, enzyme replacement therapies require the enzyme to be phosphorylated in order for the enzyme to get into the lysosome. Novazyme¿s phosphorylation technology is focused on replicating the enzymes found in healthy individuals. The enzyme is produced in a process that adds phosphate and modifies sugar molecules attached to the enzyme. This process eliminates sugar molecules on the enzyme and enables the enzyme to target the lysosome.