By Karen Pihl-Carey
Privately held Zycos Inc. raised $30.4 million in a private placement of preferred stock. It is a financing that will help the company expand its pipeline and leverage its DNA-based technologies.
Based in Cambridge, Mass., Zycos was formerly called Pangaea Pharmaceuticals Inc. Through its technology it has developed new therapies to treat cancer, viral infections and autoimmune disease.
The company intends to use net proceeds from the financing to support its lead product, which is entering Phase II trials, and to bring additional product candidates into the clinic.
"This really allows us to accelerate the internal clinical programs, as well as the preclinical programs, allowing us to move products into the clinic a little quicker than we planned to," said Mark Philip, president and CEO of Zycos. "And this will also open the door for our IPO [initial public offering] or another significant financing in about 18 months."
Dresdner Kleinwort Benson, of London, led the financing, which included William Blair Capital Partners, of Chicago. The financing round also included new investors Stephens Inc., of Little Rock, Ark.; Sofinov, of Montreal; Oakwood Medical Investments, of St. Louis; and Medical Venture Partners, of Norway. Existing investors were Lombard Odier & Cie, of Geneva, Switzerland; and New Medical Technologies, of Basel, Switzerland.
Philip said the placement was oversubscribed. "We sort of thought about $20 million would do it. We ended up with $40 [million] and took on $30 [million]," he told BioWorld Today.
Since inception in 1996, Zycos has raised more than $50 million.
Zycos' lead product candidate, ZYC101A, will start a Phase II trial in a couple of months to evaluate it as a treatment for human papillomavirus-related cervical dysplasia. A Phase I/II study in anal dysplasia already is under way. The company also is evaluating new product candidates to treat cancer, autoimmune disease and inflammation.
"We've probably got a couple of things that will get into the clinic toward the end of 2001," Philip said, adding that Zycos is talking with some companies about converting their products into DNA therapeutics. "We're hoping to see three or four [more product candidates] in the clinic by the end of next year."
Zycos intends to form collaborations with major pharmaceutical companies that either will take forward Zycos' products or use Zycos' technology to convert products into DNA therapeutics.
Zycos technology enables the rapid discovery of disease-specific antigens. The company also has developed a DNA expression system and a DNA microsphere drug delivery system. Using its technologies, Zycos was able to advance its lead product from discovery into the clinic in 18 months.