Microcide Pharmaceuticals Inc. has formed a spin-off company, Iconix Pharmaceuticals Inc., which will focus on using surrogate genetics technology to conduct genomics-based drug discovery.
Iconix's initial capital comes from a $12.5 million venture capital investment that gives investors a 50 percent stake in the company. Microcide will retain a 35 percent stake, with the rest reserved for the founders and employees of Iconix.
Investors in the private placement were Abingworth Management, of London; Institutional Venture Partners, of Menlo Park, Calif.; and Kleiner Perkins Caufield & Byers, also of Menlo Park. Microcide will provide Iconix with an additional $6.1 million in research and development funding over three years for the antiviral program.
Microcide and Iconix have entered into a three-year scientific collaboration to develop antiviral agents. At the end of those three years, Microcide will have an option to extend the collaboration by two years on a year-by-year basis.
"Microcide has been focused on developing novel antimicrobial agents," said Jim Rurka, president and CEO of Microcide. "Creating Iconix will allow us to keep our focus while expanding into antiviral agents."
Microcide's chief operating officer, Keith Bostian, will serve as president and CEO of Iconix, which will initially rent space at Microcide's Mountain View, Calif., facilities and pay its parent firm for administrative services.
Since its inception in 1992, Microcide has focused on discovering "essential genes" that regulate the life of bacteria or enable bacteria to become drug resistant. The approach allows the company to aim its efforts at only the "pharmaceutically relevant portion of an organism's genome."
Iconix has licensed Microcide's Surrogate Genetics technology, which places human genes in surrogate hosts such as yeast and bacteria. By creating high-throughput assays, Iconix can screen a large number of chemical compounds to see which compounds modulate expression of those genes.
In addition to identifying small-molecule drug candidates, the screens will allow the company to use active compounds in mammalian cell cultures and animal models to develop a database of the metabolic pathways at play in a variety of diseases.
"In our minds, this is a totally new way to approach discovering the function of genes," Rurka said. "In addition to the viral work that we will collaborate on, Iconix is in the process of deciding which disease it will focus on."
Rurka told BioWorld Today that in forming Iconix, Microcide intends for the new company to aggressively advance its research efforts and seek independent financing in the future.
Kevin Tang, an analyst with BT Alex. Brown, in New York, wrote that "through Iconix, Microcide gains a valuable antiviral drug discovery program. With this addition, Microcide has successfully expanded its drug discovery platform to all infectious diseases caused either by bacteria, fungi or viruses."
Tang rates Microcide's stock (NASDAQ:MCDE) a "buy." The firm's shares closed Friday at $9.75, down $0.125. *