DUBLIN, Ireland - Modex Therapeutiques SA, which is using encapsulated cell technology to develop cell and gene therapies for chronic systemic diseases, has raised US$8 million in its second financing round. The company's new shareholders are Atlas Venture and Banexi Ventures, both of Paris, and the Novartis Venture Fund, of Basel, Switzerland.
Its earlier investors, Alta Partners, of San Francisco, Alta Berkeley, based in London and Geneva, and Geneva, Switzerland-based Lombard Odier participated in the current round as well. These three organizations also converted bridge loans totaling US$1.6 million to equity.
Lausanne, Switzerland-based Modex's market capitalization now stands at US$29 million, said Jacques Essinger, CEO.
The recent investment represents almost three years of operational cash for the company, Essinger said, and Modex has two short-term priorities. It aims to bring at least one of its applications to clinical trials as quickly as possible, and wants to secure a partnership deal with a major pharmaceutical company.
Modex was established in 1996 as a 50 percent subsidiary of CytoTherapeutics Inc., of Lincoln, R.I., to develop applications of that firm's cell encapsulation technology outside its core domain, the central nervous system. Modex gained independence from CytoTherapeutics last year, when the latter company reduced its shareholding to around 25 percent. Its stake has been further diluted to less than 20 percent in the recent round, said Essinger. (See BioWorld International, Nov. 19, 1997, p. 1.)
Modex has licensed applications of CytoTherapeutics' encapsulation technology for treatment of Type I diabetes mellitus, non-insulin-dependent diabetes mellitus and blood disorders. It currently is considering licensing the technology for application to osteoporosis, Essinger said.
In all cases, the appropriate therapeutic substance is administered to the patient via small cell-containing implants, enclosed by a semi-permeable membrane to protect against immunological rejection. The cells contained within the implant obtain oxygen and nutrients from their host. With the exception of Type I diabetes, which requires a different order of drug dosage, Modex's various disease applications will rely on a standard delivery vehicle, currently under development. Only the “engine,“ such as a gene or cell encoding a therapeutic substance, will differ, said Essinger.
He expects the first application to reach the clinic will be the use of the hormone erythropoietin (EPO) in the treatment of anemia. This is the fastest and easiest application to test, he said, and has an easily measured endpoint. As well as demonstrating the validity of the specific application, the company wants to establish “clinical validation of the whole technology,“ Essinger said. “We're putting our effort and resources towards this and we're not going to be diverted from it,“ he added.
Modex is seeking two types of partnership. The company wants to develop relationships with companies that have a direct interest in its chosen therapeutic fields. But it also aims to forge partnerships opportunistically with firms that have drug delivery issues related to physiological regulation, or problems with protein instability or patient compliance. *