By Matthew Willett
AeroGen Inc. completed a $16.9 million private placement financing that included existing investors CMEA, Wheatley Partners, Invesco Funds Group Inc., Veridian Capital and Interwest Partners.
The pulmonary drug delivery technology development company, founded in 1991, has products in development for the treatment of asthma, chronic destructive pulmonary disease (COPD), cystic fibrosis and infectious diseases. The Sunnyvale, Calif., company first sought and received venture capital financing in mid-1994. This is the company's fourth round of private financing.
"We're pleased to have this additional financing and pleased with the quality of individuals interested in our company," Chief Financial Officer Deborah Karlson said.
MVI Medical Venture Investments Ltd., The Kaufmann Fund and Hunt Ventures LP joined existing investors in the round. Musket Research Associates was placement agent for the financing.
AeroGen technology focuses on the aerosolization of drugs in aqueous or non-aqueous solutions or suspensions. It uses electronic controls to regulate dosage and provide reproducible, controlled delivery in single- or multiple-breath applications.
Karlson said the company plans to use the funding for general operations and research. "We're interested in developing this technology for both systemic and respiratory delivery for ourselves and for our client partners," she said.
She added the company will use the funding for pipeline development and operating capital through commercialization of its main product, the AeroNeb, due to hit the market early next year.
"We're a development-stage company, so we'll continue to develop our technology toward releasing our products," she said.
AeroNeb, the company's nebulizer kit, is hand-held and eliminates bulky compressors. AeroGen's inhaler line, the AeroDose series, comes in single- and multi-dose configurations as well as a dual-chambered variety and a variable-dosing configuration.
Karlson said the company plans to release the nebulizer early next year. She added that several biotech companies have expressed interest in AeroGen products, and that the company currently engages in two partnerships.
One partnership, with Becton Dickinson and Co., is a co-development agreement for the AeroDose inhaler. BD assisted in the design and manufacture of the product, in addition to making an equity investment in AeroGen.
The company has a second partnership with PathoGenesis Inc., of Seattle, begun in March. That alliance mates PathoGenesis' tobramycin solution for inhalation with AeroGen's inhaler.
Under the terms of that arrangement, AeroGen will receive royalties on the marketed product, and PathoGenesis invested $2.5 million in convertible AeroGen preferred stock.