By Karen Pihl-Carey

With proceeds from a private placement of special warrants, MDS Proteomics Inc. spun off from its parent company, MDS Inc., becoming a separate entity focused on protein interactions for the development of therapeutics and diagnostics.

MDS Inc., of Toronto, worked to build the company for about two years and remains its largest shareholder.

Through the sale of 3.3 million special warrants at US$17.24 (C$25) each, MDS Proteomics raised gross proceeds of US$56.9 million (C$82.5 million), or about US$54.3 million net, in its first independent financing.

The placement values the new company at about US$414 million. Canaccord Capital Corp., HSBC Securities Canada and Yorkton Securities Inc. acted as underwriters for the private placement.

¿This is really our initiative in the proteomics field, and the primary purpose is going to be to understand the role that proteins play and that protein interactions and protein pathology plays in disease,¿ said Frank Gleeson, president and CEO of MDS Proteomics. ¿MDS is our largest shareholder, and our plan over time with our success of financings is for that to become less and less the case, so this will become an independent company.

¿The plan is to go public and to do that as quickly as possible,¿ he added.

MDS Proteomics expects to use proceeds from the private placement to further fund its proteomics platform technology aimed at using advanced knowledge of protein-protein interactions in the development of therapeutics and diagnostics. The funding will help establish cell pathway analysis factories to understand protein pathways in disease, using MDS Sciex¿s second-generation mass spectroscopy technology.

¿I think that this is a particularly exciting area of inquiry and study because we know so much more about genes and the function of genes, and we know that proteins are really the manifestations of disease,¿ Gleeson told BioWorld Today. ¿And we¿re further learning that proteins act in complex pathways, and it¿s these pathways that really lead to new targets for intervention.¿

Gleeson said the company is looking broadly at diseases, as opposed to one particular disease, and that it will partner with biotechnology and pharmaceutical companies in various disease areas. The plan is to move into product development within the next three to five years, Gleeson said.

The company¿s private placement is expected to carry it through 18 months.

Mark Pearson, MDS Proteomics¿ chief scientific officer, said the identification and validation of new targets for new small-molecule drugs could be as much as six to 12 years away, while the development of proteins that have their own therapeutic potential could take less time.

¿Nearer term,¿ he said, ¿some of the proteins that we identify have the potential for use as biomarkers and diagnostics. And in the biomarker business, these proteins could be used to stratify individual patients who are entered into clinical trials.

¿One of our objectives,¿ he said, ¿is that medicine will become personalized and individual phenotypes will become important both in identifying the onset of disease and following therapy.¿

With the Sciex mass spectroscopy technology, MDS Proteomics will be able to do in an afternoon what it took a couple of years to do in the 1980s, Pearson told BioWorld Today. ¿So there is a dramatic speedup in the time to analyze proteins in particular pathways.¿

Another goal of MDS Proteomics is to continue to develop a database that describes protein-protein and protein-ligand (small-molecule) interactions. The Binary Interacting Network Database (BIND) has been built by collaborators Chris Hogue at Mt. Sinai Hospital and the Samuel Lunenfeld Research Institute in Toronto, along with a consortium of Canadian researchers, Pearson said.

In reaching its goals, MDS Proteomics plans to incorporate the expertise of two of its units, MDS Protana AS, led by Matthias Mann at the University of South Denmark in Odense, Denmark, and MDS Ocata, led by Tony Pawsona at Mt. Sinai Hospital in Toronto.

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