By Kim Coghill

Washington Editor

Galileo Laboratories Inc., a private company based in Santa Clara, Calif., said Tuesday it raised $31 million in third-round venture financing.

The company discovers and develops pharmaceutical and nutritional products for oxidative and metabolic stress associated with chronic conditions such as cardiovascular disease and diabetes.

In previous private financing ventures, Galileo in June 1999 raised $11 million and in January 1998 raised $4.25 million, according to Guy Miller, company chairman and CEO.

New investors joining lead investor North Castle Partners are H&Q Life Sciences and H&Q Healthcare, Sofinov and The Chatterjee Group.

Miller said North Castle Partners and H&Q Life Sciences bring important strategic dimensions to the company. "Having the strong endorsement of H&Q on the technology side serves the company very well in terms of their vote of confidence in the technology of Galileo," he said. "On the strategic side, North Castle Partners is the leading investor in healthy living and we will work with them to bring products into their portfolio companies." North Castle Partners owns Leiner Health Products, EAS, Enzymatic Therapy, Grand Expeditions and Saratoga Beverage Group.

Existing investors participating in the financing were Alloy Ventures Inc., Brinson Partners Inc., Bay City Capital LLC and CMEA Life Sciences.

Miller said the financing will support Galileo's nutrition and pharmaceutical programs.

Galileo in October initiated clinical studies of NIS215 in Type II diabetes. The single-center trial will evaluate improvements of end-organ function achieved by targeting the systemic inflammation and oxidative stress component of diabetes. Primary study endpoints include improvements in glucose control and renal function. Secondary endpoints are reductions in existing and novel serum and urine biomarkers of systemic inflammation and metabolic stress response.

The company has a strategic alliance with Fraser, N.Y.-based DMV International Nutritionals to co-develop, research and sell proprietary peptide-based products.

In March, Galileo and the Iams Co., a Procter & Gamble subsidiary, formed an alliance to build a new generation of companion animal nutrition products.