By Mary Welch

Variagenics Inc., a pharmacogenomics company, raised $20 million in a self-managed private placement, with the proceeds earmarked to augment its research programs and infrastructure.

¿We are greatly expanding our research programs as well as our management team and overall infrastructure,¿ said Taylor Crouch, Variagenics¿ president and CEO. ¿We just hired an executive vice president of commercial operations and we expect to add senior management as well as other staff to the company.¿

Privately held Variagenics has raised $55 million since its inception in 1992. Last August it raised $19 million in a private placement. At that time the Cambridge, Mass., company said that should help it become ¿cash positive.¿ (See BioWorld Today, Aug. 3, 1999, p. 1.)

However, in today¿s flush financial market, Variagenics ¿decided to pursue investors more aggressively now, where a year ago it was more prudent to manage our cash more aggressively,¿ Crouch said. ¿This placement should last us a couple of years.¿

Crouch said that this $20 million round was a ¿little on the high end of what we were targeting. It¿s a good market and there seems to be a lot of investors interested in our company and biotechnology in general.¿

As to whether or not the company will follow so many other biotech firms this year and register for an initial public offering, Crouch said, ¿We have to be considering that option.¿

The company attracted two new investors: CIBC Capital Partners, of New York, and Essex Investment Management Co., of Boston. CIBC also led the round. Existing investors that participated in this financing included The Sprout Group; Atlas Venture, of Boston; Oxford Bioscience Partners, of Westport, Conn.; Forward Ventures, of San Diego; and Advent International, of Boston. The Sprout Group is the venture capital affiliate of New York-based Donaldson, Lufkin & Jenrette Inc.

Variagenics identifies clinically important variances of single-nucleotide polymorphisms (SNPs) in genes that affect drug action and applies it to the discovery and development of new drugs.

¿We¿ve been targeting SNPs over the last three years and now we are going to selected pathways in extreme detail,¿ Crouch said. ¿We are going to characterize them in a large populations so that we can understand statistically the contributions of SNPs.¿

Variagenics intends to target 2,000 genes this year.

¿In contrast to the broad-based disease-oriented people, we are looking at drilling down into great depth on these genes relative to their drug action,¿ Crouch said. ¿That¿s a real pharmacogenomics mission. The other companies look at genes broader but with less fidelity. We intend to apply genomics to problems that can be solved today.¿