By Kim Coghill
Vela Pharmaceuticals Inc. raised $16.3 million in its third round of private equity financing.
Formerly Janus Pharmaceuticals Inc., VelaPharm, of Princeton, N.J., specializes in the development of medicines for central nervous system disorders. VelaPharm voluntarily changed its name in August because of confusion with a similarly named company, according to Robert St. Pierre, Vela controller.
The company's private equity financing was led by New Enterprise Associates, which invested slightly more than $8 million, and Venrock Associates, which invested about $6 million. Robert Johnston, company co-founder and chairman, is Vela's largest shareholder, owning 27 percent, followed by New Enterprise Associates and Venrock Associates, which own 25 percent and 19 percent, respectively.
VelaPharm will use the funding to expand its in-licensed portfolio, further its clinical development capabilities and corporate business development initiatives and provide working capital.
Johnston, along with Seth Lederman, Donald Landry and Mark Fisher, president of MBF Capital, founded Janus in 1998. In its first round of financing the company raised about $250,000, and in its second round in 1999, it raised $1.1 million, according to St. Pierre.
"Obviously, this series really is the first substantial financing for the company," he said. "We will probably plan another series in the neighborhood of about $40 million to $50 million in a year. We don't have a real hard deadline for going public. It may happen sometime in early to mid-2002, but that is not a driving force for us right now."
St. Pierre would not disclose the drugs VelaPharm is currently developing, but did say there are a handful of products the company is working toward licensing. "Our business model is targeting products that large pharmaceutical companies have been working on, and for one reason or another they dropped the product from their pipeline," he said. "We would come in and look to pick up the product and license it from them, and do whatever we think is needed to continue forward."
According to a prepared statement released by the company, VelaPharm is positioning selected drug candidates for validation of safety and efficacy in clinical trials. Ongoing programs include depression, sleep disorders, anxiety, anorexia, attention deficit/hyperactivity disorder and pain management. The company also is seeking in-license candidates for the management of schizophrenia, epilepsy, degenerative disorders and other CNS indications.