BORNHEIM, Germany - 4SC AG intends to use proceeds from its EUR17 million (US$15.4 million) second-round financing in to fuel its preclinical portfolio.

CEO Ulrich Dauer said, "It will also help us to build up strategic cooperations with biotech companies and to establish business in the U.S."

4SC, of Martinsried, Germany, has three programs in its preclinical pipeline. They are drug discovery projects with compounds active against malaria, stroke and asthma, Dauer told BioWorld International.

"Our proprietary technology is virtual high-throughput screening," Dauer said. "We virtually preselect in our database chemical structures for potential interaction with targets, before we screen them physically. This makes drug discovery much more efficient. While hit rates in traditional pharmaceutical drug discovery screening are 0.1 percent to 1 percent, our hit rates are 5-20 percent. We want to complete our technology platform now by finding access to new targets."

Therefore the company is seeking strategic partnerships.

"We could fill the partner's gap in medicinal chemistry," he said. "The partner could fill our gap in target finding by genomics." 4SC is in early discussions with biotechnology companies, but is not disclosing further details, Dauer said.

4SC also intends building up a strategic platform for business development in U.S. "We are still deciding whether to do this by our own subsidiary or by partnering with an American company having specific expertise," Dauer said.

The second-round financing was led by 3i, of London and Munich, Germany. Other investors were the German companies Deutsche Venture Capital, of Munich; BioM AG, of Martinsried; Bayern Kapital, of Landshut; tbg of Bonn; Beteiligungsgesellschaft f|r die Deutsche Wirtschaft mbH, of Frankfurt; and Mulligan Beteiligungs GmbH, of Hamburg.

The company's seed financing round in August 1999 was EUR2.7 million. 4SC was founded in 1997 and employs 28 people.