By Kim Coghill

Washington Editor

Caprion Pharmaceuticals Inc., a private Canadian company that has the ability to detect proteins at the subcellular level, said Tuesday it raised US$40 million in a private placement.

Yorkton Securities Co., of Toronto, managed the placement and lead investors included Ventures West, of Vancouver, British Columbia, and Fidelity Management & Research Co., of Boston.

Lloyd Segal, president and CEO of Montreal-based Caprion, said the company will use the money to further its technology. "We are going to build a very large-scale capability in proteomics, particularly around what we call our cell mapping. We've captured a new level of resolution of cellular biology and proteomics and we're getting at the proteomics of single organelles in a completely comprehensive nature. We are proving location and orientation of proteins within an organelle down to where the protein is in the single organelle."

In its first round of financing last December, Caprion raised $2 million through Ventures West. Two weeks ago, Micromass UK Ltd., of Manchester, England, invested $7.5 million in Caprion to support the company's proteomic research, a figure that was included in the $40 million total.

Segal said Caprion's business strategy is to out-license discovery end products to its partners. "Our primary source of revenues in the near term is going to be from pharmaceutical partnerships and in the long term from royalties and license revenues."

He said depending on the market, Caprion likely will consider becoming a public company in the next 12 to 24 months.

Caprion's protein cell mapping efforts will result in a database of proteomics information for cell types under normal and diseased conditions. This information will be used to understand the protein changes underlying the pathology of diseases and to develop diagnostic and therapeutic products and treatment strategies.

The company's current programs include the first diagnostic products for BSE (mad cow disease) and its human strain, Creutzfeldt-Jacob's Disease, as well as earlier-stage diagnostics and therapeutics programs in Alzheimer's disease and amyotrophic lateral sclerosis.