By Debbie Strickland

Versicor Inc., a two-year-old Sepracor spin-off, raised $22 million in an oversubscribed private placement intended to see the company through until an initial public offering.

Based in Fremont, Calif., Versicor is developing antibiotics for Gram-positive bacteria that are resistant to existing drugs.

Prior to this first financing, the company was a wholly owned subsidiary of Marlborough, Mass.-based Sepracor Inc. The parent firm now owns less than 20 percent of Versicor, and has one seat (out of seven) on the board of directors.

Lead underwriters in the private placement were HealthCare Ventures, of Boston and Princeton, N.J., and New Enterprise Associates, of Menlo Park, Calif.

Versicor Using Genomics

Investors included Abingworth Management Ltd., of London, Hambrecht and Quist Capital Management, of Boston, SROne, of Wayne, Pa., and Rho Management, of New York.

The proceeds are enough to fund operations for at least 18 months while the firm eyes the IPO market, said George Horner, Versicor's CEO.

Sepracor established Versicor in October 1995, licensing to its spin-off a portfolio of synthetic chemistry technologies designed to create drug-like heterocyclic compound libraries of complex molecules rich in chirality.

Since then the company has integrated its combinatorial chemistry platform into what it calls "a balanced format," incorporating biology, functional genomics, high-throughput screening and informatics.

"This is totally different from our competitors," said Horner. "Most of our competitors focus on a single core competency, but Versicor employs a balanced approach. This is our critical point of difference."

In March, Versicor launched a collaboration with Genome Therapeutics Corp. (GTC), which provides validated bacterial genomic targets from GTC's PathoGenome database together with functional genomics information.

The companies will share costs and revenues 50-50. In addition, Versicor has some marketing rights, while Waltham, Mass.-based GTC gained warrants to acquire equity in Versicor.

Horner would not disclose additional information about the company's programs, except to say preclinical testing is in progress. *

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