PARIS - DrugAbuse Sciences (DAS) has raised FFr140 million (US$22.4 million) from a group of European investment funds in a private funding round.

The company's founder and chairman, Philippe Pouletty, said, "This is the biggest funding round ever completed in the biotechnology sector in France and one of the largest ever in Europe."

He added that the company had been seeking to raise no more than $12 million to $15 million, but found that venture capitalists were prepared to put up as much as $25 million. He settled for $22.4 million, he said, because "that is the amount necessary for completing the development of our first medicine." The operation puts a value of some FFr360 million (US $58 million) on the company, which says it is planning to seek a stock market listing toward the end of next year.

The investors include three existing shareholders: Partech International, CDC Innovation and La Financihre de Brienne, which had injected FFr36 million into the company in its first funding round in 1997, and seven newcomers: 3i, ABN-Amro, Auriga Venture, Nomura, Parnib, Sociiti Ginirale Asset Management and Rothschild Asset Management. Altogether, these 10 institutions now hold a 39 percent stake in the company, while Pouletty retains 20 percent.

DAS is a Franco-American company with offices and laboratories in both Paris and San Francisco that Pouletty and three U.S.-based associates (two of them French) founded in 1995. It is developing drugs to treat alcohol dependency and drug addiction. It regards alcoholism and drug addiction as "chronic neurological diseases that can benefit from medical treatment, rather than psychosocial problems."

Its lead compound, Naltrel, is a slow-release version of Naltrexone, a heroin antagonist used for treating both drug abuse and alcoholism. It is currently undergoing Phase I clinical trials in the U.S. and the company hopes to have it on the market by 2001. Next year, DAS plans to start clinical trials of a second compound, COC-Ab, an antidote for treating the effects of cocaine overdoses, and is hoping to obtain regulatory approval for it by 2002. Its medium-term financial target is to attain break-even in 2002 or 2003.

Pouletty explained that the $22.4 million would be used not only to fund the company's ongoing research and development program but also to establish a sales and marketing force. DAS plans to market its products itself, an aspect of its business strategy that Pouletty was keen to stress.

"Biotechnology companies that limit themselves to research and development are making a mistake," he said. "You don't build a large company with royalties."