Arpida, a Swiss antimicrobial drug discovery and development company that has a trio of U.S.-based scientists on its team of scientific founders, raised CHF40 million (US$22.6 million) in what CEO Khalid Islam described as a "heavily oversubscribed" second round.

The investment values the Munchenstein-based company at CHF86.4 million.

The funding round added several new investors to the company's shareholder base, including Swiss funds HealthCap, Partners Group and the UBS venture fund Aventic, as well as the Canadian fund BioCapital Investments. The company raised CHF15 million in July 1998 from New Medical Technologies, 3i plc, Alta Berkeley Associates and CDC Innovation partners, all of which participated in the recent round. New Medical Technologies founder and Managing Director Andre Lamotte is a co-founder of the company and chairman of its board.

Arpida, which commenced operations in January 1998, is taking a genomics-based approach to finding new classes of antibiotics that act on novel targets. It has four programs in advanced preclinical stages, six additional programs at earlier stages of development, and it is examining seven additional targets, Islam said.

Arpida bills itself as a "second-generation start-up," combining the innovation and speed of a start-up with the drug development capabilities of a more mature outfit. "We think that to create value within a company you need to progress compounds into clinical stages," Islam said. "What we plan to do is to take molecules from exploration to the end of Phase II." The company also aims to license out some of its leads to pharmaceutical companies.

The company has strong pharma industry linkages. Two of three co-founders held senior positions at F. Hoffmann-La Roche Ltd., which has a royalty position in one of its lead compounds. Dieter Gillessen, now Arpida's chief operating officer, was formerly head of peptide and nucleotide research at the Basel-based company, while Ivan Kompis previously headed its anti-infectives research activities.

Islam was promoted to CEO of Arpida in April, having joined the company in July last year as head of R&D. Immediately prior to that, he spent three years at the Hoechst Marion Roussel (now Aventis Pharma AG) Paris facility, where he was responsible for managing the company's alliance with Scriptgen Inc., of Boston. Before that, he headed up the biotechnology department at the then-Marion Merrell Dow facility in Milan, Italy.

The company's scientific founders include Kompis, Tom Silhavi of Princeton University, Edmund Lin of Harvard University and Henry Paulus of Boston University.

Arpida, Islam said, is taking an integrated multidisciplinary approach to target discovery and lead selection and optimization. It combines genomics with knowledge of metabolic pathways to develop functional assays for target validation. It also has proprietary technologies for identifying the putative function of uncharacterized genes. Potential targets are screened against the C. elegans published genome, to reduce the risk of possible homology between microbial targets and human proteins.

All of the company's current programs focus on antibacterials. The company also is looking for licensing opportunities for antifungal compounds, Islam said.

Arpida has set an aggressive development agenda. By mid-2002, Islam said it aims to have entered three corporate alliances, to have completed Phase II trials with one compound, and to have a second candidate in Phase I studies. If it achieves these goals, the company will be ready for an IPO in two years, he said.

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