By Lisa Seachrist

Washington Editor

Privately held Structural Bioinformatics Inc. (SBI) raised $32.6 million in a private offering that was originally intended to provide the company $15 million to expand its efforts in protein modeling.

The oversubscribed offering closed on Monday, and had to be expanded twice to accommodate demand from investors. ING Barings LLC, of New York, served as the exclusive placement agent for the offering.

"The demand was phenomenal. I've never experienced anything like it," said Ralph Barry, vice president and chief financial officer for San Diego-based SBI. "We've managed to attract some pretty high-profile investors, and we are very pleased."

The Series D preferred stock financing was led by Perseus-Soros BioPharmaceutical Fund LP, of New York. Other investors included INVESCO Capital Management, of Denver; Deutsche Vermogensbildungsgesellshaft mbH, of Frankfurt, Germany; Veritas SG Investment Trust GmbH, of Frankfurt; Castle Rock Capital Management, of New York; Medical Technologies, of Basel, Switzerland; Dansk Kapitalanlaeg A/S, of Copenhagen, Denmark; and BioAsia Investments, of Palo Alto, Calif.

Since its inception in March 1996, the company has raised a total of $45.3 million to pursue its computational approach to drug discovery in the post-genomic era. Barry said the money raised in this offering would be used to expand both the laboratory space and personnel within the company. The company will focus on expanding its computational ability, database infrastructure and its in-house drug discovery efforts.

SBI offers two subscription proteomic database products: SBdBase and SVdBase. In its SBdBase product, the company has more than 180 different families of proteins with thousands of structural models of mostly novel proteins. Subscribers to this database, which is accessible over the Internet, can use the protein modeling technology to identify lead drug candidates.

"There are a lot of companies that claim to be able to bridge the gap between genomics and drug leads," Barry said. "In the last 20 months or so, we've been able to provide a lead drug eight out of eight times. That's a pretty compelling story."

The company's SVdBase is a database of structural protein variants. Currently, the database includes structural variants for the HIV reverse transcriptase and HIV protease enzymes. Barry said the company is working on adding HIV integrase variants to the growing database. These HIV databases are being developed in collaboration with Quest Diagnostics Inc., of Teterboro, N.J.

This database looks at the individual amino acid changes that exist in these HIV proteins. Subscribers ultimately can use that information to assess whether a particular drug is widely active for a large number of these variants. With that information in hand, Barry said companies can choose to create drugs that will have utility in the broadest groups of patients.

"If you can get this sort of information up front, you can potentially save millions of dollars and countless months, even years, of wasted effort," Barry said. "We are allowing people to understand these issues as you go into the drug discovery process."

In addition to its subscription business, Barry said the company has an in-house drug development program. With the new funds, he noted the company now has the luxury of devoting staff exclusively to that in-house effort in an attempt to move the drug leads closer to clinical trials before seeking pharmaceutical partners. The company has programs to find small molecules active on tumor necrosis factor, the HER-2 receptor found in breast cancer and interleukin-5.

"Now, we may be able to hang onto these leads a little longer in order to extract greater value from them downstream," Barry said.

SBI also has collaborations with DuPont Pharmaceuticals Co., of Billerica, Mass.; BioChem Pharma Inc., of Laval, Quebec; and Japan-based Yamanouchi Pharmaceutical Co. Ltd.