Graffinity Pharmaceutical Design GmbH is seeking DM50 million (US$23.2 million) in second-round funding to scale up its microarray platform technology, which analyzes binding interactions between target proteins and small molecules.

CEO Dirk Vetter said he hopes to close off the investment round by the end of the year. The company, based in Heidelberg, Germany, entered its first two collaborations in the past month, with in vitro diagnostics manufacturer American Diagnostica Inc., of Greenwich, Conn., and with Knoll AG, of Ludwigshafen, Germany, the principal component of BASF AG's pharmaceuticals operations. Each involves the chemical "fingerprinting" of a small number of target proteins using Graffinity's array-based drug discovery platform.

The company is positioning itself as a bridge between classical biotechnology, which is focused on target discovery, and big pharma, whose strengths lie in lead development. Its microarray system can analyze up to 12,000 separate interactions between a protein and a small-compound library and, according to Vetter, can provide early information on the "drugability" of targets, even when only small amounts of material are available. It both shortcuts and complements high-throughput screening, he said.

The microarray platform contains 12,000 wells, each of which is individually coated with a structurally characterized compound laid over a gold-plated surface. The screening approach is pharmacophore-based. It includes different spatial presentations of the same molecule, to allow for the precise geometry of protein interactions. It employs surface plasmon resonance to detect binding events between free protein and bound molecules, interactions that excite the gold electrons and cause them to enter a temporary plasma state, which can be quantified.

Graffinity has developed Java-based proprietary software for storing and analyzing the information, which it delivers on CD-ROM to partners and customers. Each well in the array is graphically depicted as an individual spot. A simple mouse click calls up the associated data.

The company has built up a library of 60,000 unique compounds using a microscale massively parallel synthesis and is adding one or two new arrays per week. It can perform around 100,000 screens per hour at present, said Vetter, but it wants to boost this capability 10-fold. "What we're really playing here is a numbers game," he said. The company wants to build a broad portfolio of collaborations with biotechnology and pharmaceutical companies, based on both fee-for-service and shared-royalty models, and involving up to 200 or 300 target proteins.

This scale of activity, according to Vetter, will yield sufficient data to enable the company to explore the basic principles or rules underlying the interactions between proteins and small molecules. "We think there is something like a language here or a hidden code," he said. Virtual screening already is beginning to provide hints of this concept, he added, but Graffinity is building an empirical platform, which, he said, will be more powerful than computer prediction.

Vetter established the company in 1997 with scientific co-founders Kristina Schmidt and Holger Ottleben, whom he met at the Institut fuer Molekulare Biotechnologie in Jena. Vetter previously worked at Ciba-Geigy, now part of Novartis AG, of Basel, Switzerland, and at Affymax Research Institute, of Palo Alto, Calif.

Graffinity raised DM8 million in its first financing round two years ago. Initial investors included Technostart Ventures, of Ludwigsburg, Germany; 3i plc, of London; Heidelberg Innovation BioScience Venture, of Heidelberg; and the government-backed institution Technologie Beteiligungs Gesellschaft, of Bonn. Vetter is looking to bring on board new investors with a strong American presence in the upcoming round. "We are definitely looking for venture capital that can supply added value," he said.

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