By Karen Pihl-Carey

Privately held IntraBiotics Pharmaceuticals Inc. completed its largest private placement, raising $25 million to help advance Protegrin IB-367 and ramoplanin through Phase III studies.

After this Series H round, the company's valuation is a little more than $200 million fully diluted, said Bruce Fielding, chief financial officer for IntraBiotics, of Mountain View, Calif.

The financing was led by Investor AB in New York and included the company's existing investors, including Vulcan Northwest Ventures, of Seattle, and New England Partners, of Boston. The investors also received warrants to purchase additional Series H preferred shares.

"It [the financing] allows us to push the button on two Phase III trials, both to begin next year," Fielding told BioWorld Today. "Obviously, we'll be using a lot of those proceeds to fund those trials."

Kenneth Kelley, IntraBiotics' president and CEO, said the company may be the "first privately held biotech company to get two compounds in Phase III trials at the same time."

"That's quite an achievement," he told BioWorld Today, "and now we have the funding to actually carry that out and execute it."

The company had plans of possibly going public in the fourth quarter, but Fielding said company officials now are taking a "wait and see attitude." With the money raised through the private placement, it enables the company to wait until market conditions are right, he said.

Both Phase III trials will begin before mid-year 2000, Fielding said.

"One is for Protegrin and the indication to combat oral mucositis, the rinse product," he said, "and the other is for ramoplanin, and it's an oral to combat VRE [vancomycin-resistant enterococci] bacteria that are resistant in the gut. It is administered to the gastrointestinal tract."

IntraBiotics regained all rights to the topical antimicrobial Protegrin IB-367 when Bridgewater, N.J.-based Pharmacia & Upjohn ended its collaboration in August. (See BioWorld Today, Aug. 11, 1999, p. 1.)

The product, which appeared safe and efficacious in Phase II studies, is an analogue of a naturally occurring antibiotic originally purified from white blood cells of pigs. Oral mucositis is a painful mouth infection found in cancer patients receiving chemotherapy and radiation.

Ramoplanin is a naturally occurring antibiotic that has shown potent activity against methicillin-resistant Staphylococcus aureus and vancomycin-resistant Enterococcus faecium, two multidrug resistant pathogens that cause infections. IntraBiotics licensed U.S. rights to ramoplanin from Biosearch Italia SpA, of Milan, Italy, a spin-off of Hoechst Marion Roussel AG, of Frankfurt, Germany.

IntraBiotics' last private placement was at the beginning of this year when it raised $23 million. (See BioWorld Today, Feb. 2, 1999, p. 1.)