HAMBURG, Germany - Axxima Pharmaceuticals AG, of Martinsried, Germany, last month raised DM20 million (US$9.83M) in a second financing round. The company was founded under the name Virgene Pharmaceuticals in September 1997 by Axel Ullrich, a co-founder of Sugen Inc., of Redwood City, Calif., which was bought out by Pharmacia & Upjohn in June last year. Axxima focuses on the development of novel drugs against infectious diseases, reducing or even eliminating the risk of raising drug-resistant strains.

Axxima capitalizes on Ullrich's extensive knowledge of cellular signal transduction mechanisms and their pathological significance, a field he has pioneered and in which he is an internationally leading scientist. These mechanisms represent a key element of the cell's communication network which allows the transmission of signals from the exterior to the nucleus of a cell resulting in the activation or suppression of specific genes. "Cellular signal transduction pathways control all important life functions and, when defective, represent excellent target areas for side effect-free therapeutic intervention. This target-driven strategy was successfully employed by Sugen Inc. for the development of novel anti-cancer drugs," Ullrich told BioWorld International.

Similarly, in diseases caused by infectious agents such as viruses, bacteria or parasites, cellular communication also is disturbed. Once a pathogen attacks a cell, it takes control over the signal transduction pathways to create a more suitable environment for its own propagation. The severity of the consequences of such a takeover varies and may include death of the infected individual.

"We develop small molecules to interfere at critical interaction points between pathogens and the infected cell," Ullrich said. "These compounds will block the pathogen's attempts to reprogram the cell's signal transduction pathways." Axxima calls this strategy the creation of a "Signal Transduction Firewall."

Rainer Wessel, vice president of business development, added that this strategy would not be detrimental to the host cells. "Cellular communication systems show a great deal of redundancy, so blocked pathways may be bypassed. However, pathogens do not have this ability because they are highly specialized, and therefore rely on a very limited number of target molecules. Once these are blocked, the pathogen's development comes to a halt."

This entirely novel anti-infectious strategy has a considerable benefit, Wessel said. "Every anti-infective drug on the market is directed against the pathogen. In contrast, our strategy targets critical proteins in the host cells. So chances are very low that the pathogens acquire resistance against the drug. They would have to develop a completely new strategy to gain control over the cellular signaling process again." Besides, many pathogens rely on the same molecules, so that compounds with a broad activity spectrum can be developed.

Axxima combines genomic- and proteomic-based target identification validation and drug discovery technologies. "Our platform for the screening of pathogens is already established," Wessel said. "We are now in the process of mining." Axxima uses a microarray platform involving more than 900 signal transduction genes, as well as proteomics technologies for target identification. In collaboration with 16 laboratories, Axxima is actively engaged in functional genomics and proteomics studies of diseased and normal tissue for 12 pathogens, including hepatitis B and C, herpes viruses, influenza, human immunodeficiency viruses, several bacteria and protozoa causing malaria and leishmaniasis.

Validated targets will be screened in-house against small-molecule libraries in biochemical and cell-based assays. To perform the necessary synthesis of chemical compounds in quantities and qualities sufficient for clinical, toxicological and pharmacological studies, Axxima established a fully owned subsidiary, ViChem Kft, of Budapest, Hungary, last year. The company is led by Gyoergy Khri, who had been the key designer of signal transduction inhibitors for Sugen, Inc.

"Currently, we are focusing on two lead compound classes - one with broad antiviral activity, and one with specific activity against human cytomegalovirus," Wessel said.

Christoph Mempel, head of Axxima's finance department, added, "We are determined to become a fully integrated drug discovery company. Clearly, Sugen is our role model, but we will try to keep a narrow focus in the rich and highly profitable anti-infectives market. Compounds with activities outside of this focus will be licensed out, and we will seek partnerships with other pharmaceutical companies for some of our compounds on a case-by-case basis."

Axxima completed a first DM17 million financing round in 1998 with Techno Venture Management GmbH (TVM), of Munich, Germany, as lead investor. The second round was closed in February this year and was more than 100 percent oversubscribed. In addition to TVM, International Biotechnology Trust plc, UK; Alpinvest, the Netherlands; and a couple of other European institutional and private investors contributed to the private placement. The company currently employs a staff of 35.