LONDON - Personal Chemistry AB is close to completing a US$20 million private financing, after being forced to pull a $50 million listing on the Stockholm Exchange due to a misunderstanding over patents.

The company, based in Uppsala, Sweden, was to have made its debut on June 22, but pulled out four days earlier. CEO Hans Johansson told BioWorld International, "There was a misunderstanding on a patent, and a question of whether it infringed a U.S. patent. One law firm said there was no problem, another wanted more time. The problem is now sorted.

"This was not to do with the state of the market. We had the money on the table. We did consider reactivation [of the IPO] but the board decided a private placement would be better."

Johansson said there would be no impact on the commercial development of the company, which has developed a laboratory bench system for rapid chemical synthesis using microwaves. The system, called Coherent Synthesis, accelerates chemical reactions up to 1,000 times. It comes with ready-to-use reaction mixtures and a reactions database.

Promising compounds may be rejected during lead optimization because synthesis reactions are too difficult, take too long, or do not yield enough of the compound.

"This technology really changes the way medicinal chemists work," Johansson said. "They can do things they could not do before, and can afford to think creatively because it is easy to test different reactions. In one case the reaction time is cut from 10 days to seven minutes using our equipment."

The reaction in question is the synthesis of aminolyse. With the existing method the process takes 240 hours and produces a 13 percent yield. With Coherent Synthesis, the seven-minute reaction gives a 93 percent yield

Yields are improved because a greater portion of the reactants actually reacts with one another, making the subsequent purification processes faster and easier.

Johansson claims that lead optimization times can be cut from two to four years to half that time. "With genomics there are a lot more targets out there; the bottleneck is lead optimization."

The company was formed in 1997 as Labwell AB, and has raised $14 million in two previous funding rounds.

The money raised will be used to build a global sales and marketing organization and to invest in further development of the technology, including the development of a larger-scale synthesis system.

Personal Chemistry has signed deals with five pharmaceutical companies and is in negotiations with 10 others, the company said.