PARIS ¿ Thallia Pharmaceuticals, the Lyon, France-based biotechnology company specializing in extracting pharmaceutical compounds and functional foods from microalgae, is in the process of raising FFr55 million to FFr90 million (US$9.5 to US$15.5 million) through a private offering to existing and new shareholders to finance its continuing research and development program.

At the same time, it has entered into a research alliance with Rowett Research Institute, of Aberdeen, Scotland, a leading European research establishment dedicated to nutritional science. The agreement provides for Thallia to use plant extracts discovered by Rowett to develop so-called nutraceuticals, dietary supplements with a therapeutic value, as well as pharmaceutical products where appropriate.

Thallia¿s president and CEO, Alain Gilbert, told BioWorld International Thallia will pay Rowett Research Services Ltd., the institute¿s commercial arm, for access to various extracts, and has secured exclusive rights to a fruit extract that demonstrated anti-platelet aggregation activity both in vitro and in vivo. ¿Tests on humans are underway,¿ he added. Moreover, the deal with Rowett is ¿expected to be the starting-point for other programs, which will add to Thallia¿s growing portfolio of nutraceutical products.¿

The new funding round is designed to give the company the resources to pursue the development of both nutraceuticals and pharmaceutical compounds. Existing shareholders have agreed to inject FFr10 million, said Gilbert, but Close Bros., which is handling the placement on Thallia¿s behalf, has approached a large number of other potential investors including institutions and industrialists, as well as venture capitalists.

Thallia¿s existing shareholders include seven venture capital companies, five of them French, the main ones being Sofinnova; Alta-Berkeley II C.V.; CDC Innovation; Finovelec and 3i plc. Last September, Thallia completed a FFr24-million funding round, in the course of which the Belgian biotechnology company Innogenetics acquired a 10 percent stake in the company. Sofinnova, Alta-Berkeley, Finovelec and 3i all participated in that round, with 3i putting up FFr7 million.

Innogenetics remains only a shareholder at present, said Gilbert, but is set to become a strategic partner by concluding research collaboration agreements with Thallia, like those the French company entered into in 1998 with three other pharmaceutical companies ¿ Glaxo Wellcome plc; Pharmacia & Upjohn; and Biosearch Italia. All three are using their screening and drug discovery facilities to discover new chemical entities with therapeutic potential from microalgae extracts supplied by Thallia.

The agreement with Biosearch, concluded last September, calls for the two partners to discover and develop new antibiotics and anti-infective compounds that are effective against bacteria resistant to existing agents. For Biosearch, which specializes in anti-bacterial drugs, Thallia¿s microalgae collection complements its own microbial library, which consists mainly of a collection of fungi streptomycetes and actinomycetes. Biosearch will share with Thallia all the information generated by their joint research program, while Thallia will make available to Biosearch data related to the preparation and fractionation of extracts.

Thallia¿s collection of more than 7,000 microalgal strains is the largest in the world, and can be manipulated to produce compounds with potential therapeutic value. As well as making the collection available to its pharmaceutical partners to discover new chemical starting-points for drug discovery programs, Thallia has its own microalgae screening program for developing nutraceuticals and pharmaceutical compounds.

The company possesses a number of patents relating to the production and use of microalgae, and has built a photosynthesis facility in Tarbes, in southwestern France, to provide it with the biomass it needs for extracting active compounds of therapeutic value. The plant utilizes Thallia¿s proprietary technology for the continuous, controlled autotrophic production of microalgae biomass using a closed, self-cleaning tubular photobioreactor. The modular design of the plant will enable it to be expanded as and when necessary.

The first product Thallia expects to bring to market is Zeamax, which consists of dry biomass containing a high concentration of natural zeaxanthin and is available in the form of either capsules or tablets. Zeaxanthin is an antioxidant oxycarotenoid that could play a key role in preventing age-related macular degeneration, a condition that contributes to the development of blindness in people over 35. The company is in the final stages of negotiation for marketing approval in the U.S., under regulations covering food supplements. n