BioWorld International Correspondent
PARIS - The Franco-American company DrugAbuse Sciences Inc. raised $24 million (EUR27 million) in an international funding round in which 14 European and American venture capital funds participated, as well as the company's founder and management.
The lead investor was Canaan Partners, of Rowayton, Conn., a new shareholder, while the next largest participant was an existing investor, London-based 3i. The other U.S. investors were Bionex, the U.S. affiliate of a UK fund; Jalla Equities; Palladin Group; and Partech. Other European participants, all existing shareholders, were ABN Amro, of Amsterdam; NIB Capital Private Equity, of Brussels; Nomura Securities, of London; and Paris-based ACE Management, Auriga Ventures, CDC Innovation, Financihre de Brienne and LCF Rothschild Asset Management.
Announcing the completion of this latest funding round at a conference in Paris, the founder and chairman of DAS, Philippe Pouletty, disclosed that he and his staff had participated in the operation, but that their combined share had fallen from 25 percent to 20 percent. The largest shareholders now are Pouletty, Canaan, Partech and 3i, in that order, BioWorld International was told by CEO Elizabeth Greetham.
DAS had been on the verge of launching an IPO on the Nasdaq market last October, in which it would have raised $60 million, but pulled the plug at the last moment when the bottom started falling out of the market. The company's last funding round was completed in October 1999 and netted it $23.2 million. According to Pouletty, it still had "quite a bit of cash in the bank" when it launched this operation, which values the company at EUR94 million (US$84 million). DAS has now raised a total of $54 million, consisting of $49 million in capital and $5 million in grants and subsidies.
Pouletty said the company now had "sufficient funding for at least two years," given that its current burn rate of around $1 million a month is set to decline because the future costs of clinical trials are to be shared by the National Institutes of Health in the U.S. and possibly the European Commission as well. He ruled out another private funding round, saying the next step was to launch an IPO on the Euronext and/or Nasdaq exchanges when market conditions permitted. Analysts expect the company to move into profitability in 2004.
DrugAbuse Sciences, of Paris and Los Altos, Calif., is developing three different kinds of drugs in the field of substance abuse: medicines for treating alcohol and drug dependence, medicines constituting safer substitutes than addictive narcotics, and medicines for treating overdoses. It has two products in clinical development and plans to embark on trials of two more before the end of this year. Its first drug, for the maintenance of alcohol and heroine withdrawal, was launched on the U.S. market in late 2000. Called Vixo, it is an oral formulation of naltrexone, which Pouletty described as a "small drug on which the company's future does not depend."
The product DAS is banking heavily on is Naltrel, a depot version of naltrexone for maintaining abstinence that uses the company's proprietary slow-release technology, LACTiz, and is administered by monthly intramuscular injection (whereas pill formulations have to be taken daily). Phase III trials involving 300 patients are under way at 30 centers in the U.S., and Pouletty expects the results to be available in July or August. If positive, DAS plans to file Naltrel for regulatory approval in the U.S. at the end of 2001 and in Europe in the first half of 2002.
Earlier this year, a Phase II trial of Naltrel for the treatment of heroine addiction demonstrated "sustained opiate blockade" over a six-week period, and the company is likely to embark on a Phase III trial in that indication as well.
The other product in clinical development is DAS-431, a dopamine receptor agonist for treating cocaine addiction, which DAS is developing under license from Abbott Laboratories, of Abbott Park, Ill. It has two therapeutic applications - as an antidote through the direct administration of anti-drug antibodies, and as a vaccine that stimulates the patient's dopamine receptors.
DAS has five more drug candidates in its product pipeline for treating different forms of substance abuse. They include Buprel, a once-a-month injectable, slow-release formulation of buprenorphine for the treatment of heroine addiction, and COC-AB, an antidote for treating cocaine overdose, both of which are due to be in Phase I trials by the end of 2001. In addition, DAS plans to start clinical trials in 2002 of a vaccine for initiating cocaine withdrawal.
Pouletty also said that, to ensure the company's long-term development, it will embark on genotyping studies of both alcohol dependence (involving 5,000 patients) and drug dependence (6,000 patients) in collaboration with 50 specialist centers around Europe. The aim, he said, was to "identify the genetic factors associated with dependence and discover new molecular targets for drug development."