By Lisa Seachrist

Washington Editor

Privately held immunology specialist Pharmadigm Inc. raised $8.6 million in a private placement to fund Phase III clinical studies of its lead product, PB005, an injectable formulation of the steroid hormone dehydroepiandrosterone.

Salt Lake City-based Pharmadigm managed the placement of Series D convertible preferred stock on its own. Zurich-based New Venturetec, a publicly traded Swiss investment firm managed by Swiss venture capitalist Peter Friedli, bought the bulk of the shares through a $6.5 million investment.

¿We are very gratified to move forward with this financing and the clinical development,¿ said Steven Eror, chief financial officer for Pharmadigm. ¿We think that we are a product company. If we are successful with the next phase of clinical development, we will move rapidly to have a product on the market.¿

Pharmadigm will begin Phase III studies shortly with PB005, an injectable dehydroepiandrosterone sulphate, or DHEAS. Derived from dehydroepiandrosterone (DHEA), which is a naturally occurring steroid hormone produced in the adrenal glands, Pharmadigm is exploiting the compound¿s anti-inflammatory properties in order to stymie the inappropriate immune response associated with acute asthma, severe burns and reconstructive surgery.

¿PB005 really shortens, or, we like to say, truncates, a certain part of the inflammatory response,¿ Eror said. ¿In a situation where the inflammatory process is harmful, it stops the process and allows cells to start healing.¿

DHEA can be found on the shelves of any health food store these days. However, Pharmadigm is using the hormone at extremely high blood levels to have a clinical effect, making an injectable formulation vital. Eror said that the blood levels used in the Phase II clinical trials simply can¿t be obtained with oral formulations.

In addition, the company has a number of use patents for DHEA as well as the proprietary injectable formulations. Also, the company may benefit from a lack of competition because it is the only one developing these steroid hormones for the acute care arena.

The company hopes to have sufficient data on PB005 to file a new drug application at the end of 2000. Its second injectable DHEA formulation, PB007, is currently being tested in animals as a means to treat reperfusion injuries that occur when blood flow is restored after a stroke, cardiovascular surgery or heart attack.

Because stroke, heart surgery and heart attacks temporarily cut off blood supply to the brain or heart, those organs are at risk for cellular injury when the blood flow is restored. The return of blood flow sets off a cascade of events, including the production of free radicals and the release of chemicals that cause inflammation. Preclinical studies indicate that PB007 can stop that inflammatory process, and the company plans to move to clinical studies soon. The company is looking for corporate partners to help fund clinical development of PB007 because it is such a large indication.

Pharmadigm also is developing a proprietary tissue-specific, nonviral DNA vector for use in DNA vaccines. n