By Brady Huggett
Pharmasset Ltd. pulled in a $7.4 million private round of equity financing, money it will use to fuel research at its wholly owned Pharmasset Inc. subsidiary.
TVM Techno Venture Management, of Munich, Germany, Boston and San Francisco, made the equity investment.
"This will allow us to accelerate the science, which is the focus of the organization," said Alan Roemer, vice president, business development, at Pharmasset Inc. "It will be used for small-molecule research at Pharmasset Inc. The money will go to Pharmasset Ltd. and in turn go to providing funding to the U.S. operations."
Pharmasset Ltd. is based in Bridgetown, Barbados, while the U.S. research operation - Pharmasset Inc. - is located in Tucker, Ga.
The funding brings Pharmasset Ltd.'s total amount raised since it was formed in May 1998 to more than $16 million. With prudent spending, said Roemer, the money could last a while.
"We have a low burn rate," he said. "We figure we have sufficient funding for another three years, and we anticipate additional milestones. We are a financially and fiscally conservative organization."
Pharmasset will evaluate its next financial step, Roemer said, not only at the three-year mark, but along the way as well, discerning whether an initial public offering or another financing would be best for the company when the time comes.
All four of Pharmasset's founders are from universities in the Southeast. Dennis Liotta and Raymond Schinazi are from Emory University in Atlanta. Jean-Pierre Sommadossi is from the University of Alabama, Birmingham, and Chung Chu is from the University of Georgia. Schinazi was the principal founder and is on the board.
Pharmasset launched itself with in-licensed technology from the founders and other scientific colleagues, thus giving it the identity of a university-based start-up. However, it is privately held, has 20 employees and is growing, Roemer said.
Pharmasset focuses its research on agents against HIV, hepatitis viruses and cancer, including inhibitors of inosine monophosphate dehydrogenase. Its business strategy calls for guiding preclinical and clinical development of its proprietary technologies up to investigational new drug applications or Phase I/II trials.
It signed a deal with DuPont Pharmaceuticals Co. in 1999 for development of a nucleoside reverse transcriptase inhibitor for HIV and hepatitis B. Its potential value exceeded $30 million. (See BioWorld Today, Sept. 30, 1999.)
"We focus on what we do best," Roemer said, "which is preclinical testing and nucleoside chemistry. Through joint ventures or joint development, or co-marketing, we will try to find a partner to further advance the clinical development, although we may advance to Phase I trials ourselves with lower-risk technologies."
Alexandra Goll, TVM's lead partner for the $7.4 million investment, was added to Pharmasset's board, making her one of the 10 directors. n