By Mary Welch

VitaGen Inc., raised $10.5 million in a private placement that will help expand the Phase II trials of its Extracorporeal Liver Assist Device (ELAD), the world's first artificial liver.

Richard Piazza, president and CEO of La Jolla, Calif.-based VitaGen, said the round was "oversubscribed by $2 million, but you take it when you can get it. What was especially nice was that it was a pure equity deal. We didn't have to give up any product or licensing rights."

The round represents about 40 percent of the firm. The cash infusion will help VitaGen expand to about five more clinical sites, including King's College Hospital, in London. ELAD is undergoing its first Phase II trial in conjunction with the University of Chicago Hospitals. The 10-month trials are expected to start by September. Phase III studies are slated to begin shortly afterwards and are expected to last 12 months.

"That's our plan to date if it gets fast track designation [from the FDA], which it should," he said. "We could have this product launched in 30 months."

Patients are eligible for the current trial if diagnosed with fulminant hepatic failure due to drug, chemical, poison or viral causes with no previous evidence of chronic liver disease. Patients are treated with the device for a maximum of 10 days.

ELAD is a metabolically active, hollow fiber dialyzer, similar to the cartridges used in kidney dialysis. It is the first medical device to incorporate "immortalized" human liver cells, and works in conjunction with existing dialysis machines.

It is designed to provide temporary hepatic replacement therapy for patients with fulminant hepatic failure (acute liver failure) until their own liver can regenerate. It is also designed to sustain patients until a suitable organ becomes available for transplant.

"It is a bridge to recovery or transplantation," Piazza said.

VitaGen, which changed its name from Hepatix Inc. in 1998, plans to market the device in the U.S.

"There are only 100 transplant centers in the U.S., and 50 of them do 85 percent of the transplants, so it's a homogenous market," Piazza said. "We may make a marketing deal for Europe."