DUBLIN, Ireland ¿ NeuroSearch A/S, of Denmark, raised DKK 97 million (US$13.2 million) for a spin-off company, NsGene A/S, which has taken over its gene and cell therapy program for treatment of CNS diseases.

The investment comprises DKK 51 million equity funding, plus a soft loan of DKK 46 million from the Danish government¿s industrial development agency, Vaekstfonden. Glostrup-based NeuroSearch retains a 33 percent stake in the company. The remainder is held by a consortium of Danish investors, including BankInvest, D.A. Invest & Udvikling A/S, Dansk Erhvervsinvestering A/S, Dansk Kapitalanlaeg Aktieselskab, Lonmodtagernes Dyrtidsfond and Pensionskassen. The company plans shortly to undergo a smaller financing round with international investors.

NeuroSearch has assigned to NsGene its patent rights to neublastin, a neurotrophic factor it identified last year. Animal studies indicate the compound has a protective and growth-promoting effect on neurons in Parkinson¿s disease, said NeuroSearch president and CEO Jorgen Buus Lassen, who is chairman of the new company. NsGene will also take on all of its parent¿s existing alliances in this area. Its most advanced project is based on a collaboration with Anders Bjorklund of the University of Lund, Sweden, who, since 1987, has performed fetal cellular transplants on 250 patients with advanced Parkinson¿s disease.

Bjorklund¿s group observed a significant improvement in 60 percent of those patients. The downside is that the transplant procedure requires cells from eight to 10 aborted fetuses. NsGene will supply Bjorklund with transformed cell lines expressing either dopamine or neublastin. This approach will eliminate the practical and ethical difficulties associated with the earlier technique, Lassen said. It could also lead to an improvement in efficacy, he said, as the quality of the cells supplied can be controlled more easily.

NsGene is at least two years away from clinical trials involving naked cells expressing neublastin, he said. However, the use of cell encapsulation technology could collapse this time frame to several months. Discussions between NsGene and potential technology partners are under way, Lassen said.

NsGene is planning to develop treatments for patients who are in advanced stages of Parkinson¿s and who no longer respond to other therapies. ¿It is not going to be in competition with our anti-Parkinson¿s drug or other companies¿ anti-Parkinson¿s drugs,¿ Lassen said.

NeuroSearch¿s dopamine re-uptake inhibitor brasofensine is in Phase II trials.

Teit E. Johansen, formerly head of molecular pharmacology at NeuroSearch, is CEO of NsGene. Lars Wahlberg, formerly of Cytotherapeutics Inc., of Lincoln, Rhode Island, is chief operating officer and director of clinical development.