By Matthew Willett

Zarix Inc. completed the sale of $23.5 million in convertible preferred shares of Series C stock to fund the pivotal trials needed to support its oncology therapeutic Thymitaq, a novel thymidylate synthase inhibitor.

The Berwyn, Pa., pharmaceutical in-licenser acquired worldwide marketing rights for Thymitaq from Agouron Pharmaceuticals in late 1998. CEO John Kenward said this round of financing is a coming of age for his company.

Founded in early 1998, Zarix has, until now, operated on a relatively limited budget for a biotech company, he said.

"It's an appropriate level of financing for a Series C," Kenward said. "It'll allow us to complete a pivotal study and give us the opportunity to negotiate other products for the company, and also allow us to continue to build the infrastructure. We've tried to play ourselves low profile until we've something to say, and we believe that we've got something to say now."

The financing, led by Societe Financiere d'Innovation, the Ontario Teachers' Pension Plan, and New York Life Insurance Co., included past investors BioAsia Investments LLC, EJ Financial Enterprises Inc. and Veron International, the company's largest shareholder, with about a 30 percent stake in Zarix. New investors included Sofinov, the venture capital arm of La Caissede de Depot et Placement du Quebec, of Montreal, and the Ontario Teachers' Pension Plan, of Toronto.

Thymitaq, designated for fast-track status by the FDA in April, is currently in a multicenter, 350-patient, international, pivotal Phase III trial that Kenward said is expected to be completed between 18 and 24 months from now.

"I think that one of the things that is interesting about this company is that up until now we've in-licensed and developed drugs up to pivotal Phase III research in a very experienced industry infrastructure with less than $7 million," he said. "We've gone a long way with a small amount of money in less than three years. This money will take us through the pivotal Phase III trial under way."

Thymitaq's lead indication is liver cancer, an application of the company's patented thymidylate synthase inhibition technology that Kenward told BioWorld Today currently has no standard-of-care treatment.

"As far as I'm aware, I don't believe there are a large number of companies who are pursuing treatment for that indication, which is why we wanted to," he said. "The second thing is that there is no standard of care for this indication, though in Europe and Asia doxorubicin is often used."

Kenward said Thymitaq could have utility in a variety of indications.

"The advantage of Thymitaq is that it has a better side-effect profile, and in Phase II studies the data indicated it may increase survival over doxorubicin," Kenward said. "It's a promising new drug from our perspective, and what we call promising is that it's broadly active against a number of malignancies."

Zarix plans to market the drug independently, if it eventually is approved.

"We'll independently commercialize it in the U.S., and we have a novel strategy for commercialization in Europe, where we'll build partnerships in certain countries and our own subsidiaries in others," Kenward said. "We plan to outlicense in Japan and in the Pacific Rim and other geographies like Latin America and Southern Africa, and the reason those markets are interesting is that this drug in the U.S. and in Europe may be used in a number of malignancies. It has shown activity in colon cancer, and in liver, lung, and pancreatic cancer, though the first study is in liver cancer."