By Mary Welch
Kimeragen Inc., which is developing a genetic surgery technology known as chimeraplasty, closed a private placement potentially worth up to $15 million.
Kimeragen, headquartered in Newtown, Pa., received $7.5 million from several investors, including $3.5 million from the Burrill Agbio Capital Fund LP. In addition, Kimeragen could receive another $7.5 million from San Francisco-based Burrill upon completion of certain business milestones.
¿The financing is being done in two tranches, or parts,¿ said Gerald Messerschmidt, president and CEO. ¿We get the first $7.5 million now and the rest if we meet three business milestones by the end of 2000. We expect we will hit all of the milestones well before the time frame.¿
Messerschmidt said $15 million was what the company hoped to raise, and he didn¿t perceive the two-prong financing as unusual.
¿I think a lot of private financing is done that way,¿ he said. ¿As long as the company is making progress, the money is guaranteed. It spreads the risk out a little.¿
To collect the second $7.5 million, Kimeragen must file an investigational new drug application (IND), sign another agricultural deal and get its first pharmaceutical partner. Discussions on the latter two issues are under way, he said.
Kimeragen expects to complete the first step in the third quarter when it files an IND to use its chimeraplasty technology for Crigler-Najjar disease, a rare liver affliction in which patients become jaundiced. Few live beyond the age of 20. The only known treatment is for the patient to sleep under intense lights for at least eight hours each day.
¿First we must demonstrate that our technology is safe and then get the proper dose range to restore liver function,¿ Messerschmidt said. ¿It¿s a terrible disease. The disease is caused by a special gene in the liver, and we have made corrections in animals with that disease.¿
The Kimeragen technology is not gene therapy in the classic sense. Instead, it sets out to ¿repair¿ the genes by correcting a targeted gene directly in the body, plant, animal or bacterium. The technology is designed to fix dysfunctional DNA and restore normal gene function, with the rest of the genome left unaffected.
Chimeraplasty uses a living cell¿s own DNA repair mechanisms to make specific changes in a cell¿s DNA. The technique deploys a synthetic double-helix molecule of DNA and RNA strands, called a chimeraplast, with the sequence designed to match the target sequence but with one exception: it introduces a single mismatch intravenously.
The error triggers the cell¿s DNA repair system by binding selectively to the portion of target DNA to be modified. Once bound, the chimeraplast activates a naturally occurring gene-correcting mechanism that modifies the DNA at the target site. In effect, the synthetic sequence rewrites the cell¿s genome.
So far, the company has partnered chimeraplasty only for agricultural uses. Late last year, Kimeragen and AgriBioTech Inc., of Henderson, Nev., joined together to develop enhanced turf grass and forage seed products. (See BioWorld Today, Dec. 31, 1998, p. 1.)
The company also believes the technology could be used in pharmaceuticals, to repair genes implicated in a broad range of inherited human diseases; in plants, to enhance genetic traits; and in animal health, to correct abnormalities and enhance breed characteristics.
Researchers at the University of Minnesota in Minneapolis used chimeraplasty to introduce a mutation in the hemophilia B gene in rodents. According to the company, it was the first time that the alteration of genes within live animals was accomplished via the intravenous injection of a synthetic drug that targets and changes a pre-selected selection of DNA.
Last May, Kimeragen reported that its gene repair technique successfully corrected 25 percent of afflicted liver cells in hemophilic dogs.
Messerschmidt believes the company will file INDs for hemophilia and cholesterol metabolism soon. ¿Those indications are, of course, commercially viable.¿
As part of the private placement, Steven Burrill, a founder of Burrill & Co., will sit on Kimeragen¿s board of directors.