BORNHEIM, Germany - German-American company Cardion AG completed a third-round financing totaling EUR 42.4 million (US$38.7 million).

The money will fuel clinical development of the company's gene therapy for treatment of restenosis and further development of tissue transplants for repair of myocardial damage, Cardion said.

Gene therapy of restenosis by NOStentin is the lead product in Cardion's pipeline.

"By catheter we want to forward genes to coronary vessels, damaged by balloon dilation. This damage enhances risk for restenosis, because the atherosclerotic vessel doesn't produce enough nitric oxide to remain open," Cardion's Chief Financial Officer Philip Hilgers told BioWorld International. "Our gene vectored by liposomes makes cells produce more NO. The therapy will provide a local surplus of NO for about 10 days, long enough to avoid restenosis."

Phase I clinical trials will start in first quarter of 2001, the company said previously.

Stem cell-derived grafting for repair of infarction-damaged myocardial tissue is still in preclinical research. "Cardion has a proprietary technology for the selection of target cells - in the case of cardioprotectin cardiomyocytes - from a population of stem cells allowed to differentiate," Hilgers said. "The purity of the derived cell transplant is very high. Purity plays an important role in eliminating the risk of tumors or terratoma.

"Stem-cell derived myocardial tissue beats like its equivalent in heart," he said. "Our preclinical studies have been very successful, but we are years apart from clinical trials in man."

Cardion said part of the money also will be used to strengthen its strategic basis.

"Since we are using an allogenic approach, milder forms of immune suppression might allow for a wider use of cardioprotectin," Hilgers said. "Therefore, access to this kind of technology could prove to be strategically relevant."

The company also said the financing will advance strategic resources in the field of stem cell engineering.

Cardion is the result of merger between Cardiogene, of Erkrath, Germany, and Intracadia Inc., of Cincinnati, in November.

The financing is the third with respect to Cardiogene. It was led by TVM Techno Venture Management, of Munich, and included existing investors Deutsche Venture Capital, of Munich, and Alpinvest International BV, of Amsterdam, the Netherlands. New investors participating in this round included BdW Beteiligungsgesellschaft f|r die deutsche Wirtschaft mbH and CBG Commerz Beteiligungsgesellschaft mbH, both of Frankfurt; NMT New Medical Technologies AG, of Basel, Switzerland; and Sal. Oppenheim Jr. & Cie, of Cologne.