HAMBURG, Germany — The German-American Institute for Applied Biomedical Research GmbH (GAIFAR), of Potsdam, near Berlin, raised DM10 million (US$5.9 million) in an equity financing, one of the bigger single investments in a German biotechnology company.

GAIFAR is a basic-research-driven company focused on the development of proprietary products in rapid diagnostics, artificial bone marrow and functional genomics. Founded in 1994, it occupies two of the four buildings of the biotechnology campus at the scenic Hermannswerder peninsula, which also contains a number of conference facilities.

Currently, GAIFAR has nearly a dozen products in its development pipeline, most of them close to market introduction. They are based on several years of preceding research by the founders in the U.S. and Germany.

Institutional investors include 3i Group plc, of London, represented by its office in Hamburg; and bmp Life Science AG, a Berlin-based venture capital company founded in 1998. Klaus Krone, a German high-tech entrepreneur, is participating as a private investor and as head of GAIFAR's board of directors. The DM10 million capital raised in the financing round could be increased by additional DM12 million to DM14 million in public research and investment funding. GAIFAR expects to reach the break-even point in early 2000.

"We invested in GAIFAR because we judge the technology as excellent and the business opportunities as really huge," said Rupert Lyle, spokesman for 3i Industriebeteiligungen, of Hamburg. "Besides, the management team is very experienced in terms of legal, marketing and technical expertise."

A month ago, GAIFAR made headlines with the introduction of a rapid test for the detection of HIV infections. The test is based on one of GAIFAR's core technologies, which allows the instant detection of antibodies and antigens with a simple, heat-stable and highly sensitive technology. The HIV test device is about the size of a matchbox. For the test, a drop of blood and two solutions have to be added; the result — two blue spots if the patient is infected, and one if not — is obtained in 15 to 20 seconds.

"The test will cost around DM5 only, it is very fast, heat-stable and can be performed by unskilled personnel," Heinrich Repke, majority shareholder, CEO and scientific director of GAIFAR GmbH, told BioWorld International. "So, our main markets will be the developing countries, where nine out of 10 people infected with HIV do not and cannot know that they are infected."

Repke said GAIFAR is negotiating with the United Nations and the World Bank already about a leading participation of the company in two United Nations programs, one of which is directed to fight HIV infections. The test will be delivered to Africa, India and Southeast Asia in about half a year. European approval is expected to be granted in 1999.

GAIFAR is conducting HIV therapeutic research, too. "Our proprietary technology allows a rapid assessment of the reaction profile of individual patients towards different drug cocktails used in the so-called triple therapy. So, we are able to characterize the rare but important 'minority viruses,'" Repke explained. "This will allow reliable, patient-specific medical predictions for the first time. We are planning clinical studies in collaboration with German AIDS clinics already."

GAIFAR is raising its personnel to a total of 40 to 45 scientists and medical doctors.

"Besides, we have established a strong basis of proprietary basic research, which provides the platform for new products and technologies," Repke said. "Such a platform has been established during the past, and allows now the establishment of two new areas of business." *