By Mary Welch
Xenogen Corp. closed a $30.5 million mezzanine round of financing designed to expand its development of real-time in vivo imaging technology.
The Alameda, Calif.-based company attracted several new investors, including London-based HSBC Investment Bank PLC; Lombard Odier & Cie Ltd., of Geneva, Switzerland; Pictet & Cie Banquiers, also of Geneva; and Chevron Technology Ventures, of Point Richmond, Calif. All of the company's previous investors also participated, including Brentwood Associates, of Los Angeles; Delphi Ventures, of Menlo Park, Calif.; Harvard Private Capital Holdings, of Cambridge, Mass.; SR One Ltd., of Wayne, Pa.; and Invemed Fund, of New York.
"We actually got double what we were hoping for," said Kevin Birtchnell, Xenogen's chief financial officer. "Our feeling was if we could raise between $15 million and $20 million it would be quite nice. But demand outstripped supply. We're especially pleased with the quality of the new investors we're bringing into the family."
Xenogen has raised $48 million since its founding in 1995. Bay City Capital, of San Francisco, advised Xenogen in the transaction.
Xenon's real-time in vivo imaging technology enables the detection of fluorescent or bioluminescent cells (such as bacteria or tumor cells) inside intact living animals. This allows for a non-invasive visualization and tracking of the cells to monitor the effects of treatment with new chemical entities in vivo in real time.
"Basically we have the patents and technology where you can visualize and detect a light being emitted from inside mammals," Birtchnell said. "For the first time you get to see what's going on inside a body in real time in a real animal. The standard way of testing a drug's effectiveness is to sacrifice the animal and grind up the tissues to do pathology tests. This unique technique saves the animals, and man benefits also."
The technology is designed to allow for a rapid and direct target evaluation in living animals as well as a rapid and effective dose determination and pharmacokinetic evaluation. In addition to providing significant time and cost savings, this approach reduces the number of animals needed for testing, he said.
Birtchnell believes one reason why investors were so attracted to the company is because of the broadness of the technology. "The real benefit is that you really get a better look at the data faster," he said. "But it has many applications. Chevron participated because they believe the technology can be applied to testing chemicals. The broadness and applicability of the technology makes the technology very appealing."
Xenon has several evaluation licensing agreements, including deals with Novartis Pharmaceuticals Corp., of East Hanover, N.J., and F. Hoffmann-La Roche Ltd., of Basel, Switzerland. Novartis, for instance, is using the technology for recording and measuring tumor progression and tumor burden.
"These companies are evaluating how to apply the technology to their specific needs," Birtchnell said. "We expect to turn some of them into licensing agreements soon."