By Mary Welch
BioStratum Inc. closed on $28 million of private financing aimed at completing its Phase II trials for diabetic kidney disease, as well as Phase I/II trials for its anticancer adjunctive therapy.
The placement should last the company for about 18 months, said Wesley Fox, the company's executive vice president.
"We raised exactly what we wanted," Fox said. "We are absolutely beginning to explore the public markets immediately, but whether or not we can take advantage of this current window of opportunity, I'm not sure. We'll have to see how it plays out. We put our value on products and partnerships - and the science. Otherwise you're just trading on information and that can come and go. So you have to look carefully at the opportunity and still keep in mind your substantive goals."
Among those investing were: HealthCap, of Stockholm, Sweden; Equity Resources Group Inc., of Cambridge, Mass.; BankInvest, of Copenhagen, Denmark; Mellon Holdings Ltd., of London; and MP Bio hf, of Reykjavik, Iceland.
In addition to underwriting its two clinical trials, the company, based in Research Triangle Park, N.C., will use the funds to launch gamma 2-Metastain, a diagnostic test that detects metastatic cancer, start preclinical studies of its proprietary recombinant laminins in select wound repair and tissue regeneration applications, expand in-house drug development capabilities and increase funding and staffing for BioStratum AB, its research subsidiary in Stockholm.
A private company, BioStratum's drug candidates are directed against novel basal lamina extracellular targets involved in degenerative and invasive disease processes found in diabetes, cancer and kidney disease. The basal lamina is a specialized form of the extracellular matrix that exists as a thin membrane interacting directly with bordering cells and tissues through the binding and clustering of cell receptors. Many of the disease processes found in diabetes and cancer involve significant pathological changes to the vascular and tissue basal laminas.
The company's most developed product is Pyridorin, (pyridoxamine), a highly specific and potent inhibitor of advanced glycation end-product formations (AGEs), which occur at elevated levels in diabetic patients. AGEs are regarded as a major causative factor in the development of diabetic kidney disease. The drug recently entered Phase II for the treatment and prevention of early-stage diabetic kidney disease.
Its second product, Angiocol, should start Phase I/II trials as an adjunctive therapy against malignant melanoma. Angiocol is an anti-angiogenesis drug that targets the vascular basal lamina. It starves tumors by restricting blood supply, which in turn disrupts interactions between basal lamina components and specific cell integrin receptors that are needed to supply new blood-vessel growth.
Last year the company raised $22 million, thanks to a $6 million equity financing deal and a $16 million unrestricted research grant. The grant came from the Novo Nordisk Foundation, of Copenhagen, Denmark, and was presented by the Queen of Denmark to Karl Tryggvason, BioStratum's vice president of research and development and one of the company's co-founders. (See BioWorld Today, April 1, 1999, p. 1.)