By Frances Bishopp

Activated Cell Therapy Inc., which this week changed its name to Dendreon Corp. to reflect the company's focus on using dendritic cells to fight cancer and infectious diseases, reported the closing of an $11.7 million mezzanine financing.

The company anticipates this financing will be its last private round before undertaking an initial public offering, Peter Garcia, chief financial officer at Dendreon, told BioWorld Today.

To date, Garcia said, the company has raised more than $25 million in three rounds of financing since the company was founded in 1992. "We are doing a lot of things in the clinic," Garcia said, "and we have some near-term revenue opportunities where we feel the next step will be a public offering."

Participants in the financing included new investors Kummel Investments Ltd., of Marietta, Ohio, New York Life Insurance Co., of New York, and Singapore Bio-Innovations Inc., of Singapore, as well as previous investors Sanderling Ventures, of Menlo Park., Calif., Vulcan Northwest Ventures, of Bellevue, Wash., Healthcare Investment Corp., of Edison, N.J., and Shaw Ventures, of Portland, Ore.

Dendreon, of Mountain View, Calif., has developed a platform for the isolation and activation of peripheral blood dendritic cells that allows the company to generate therapeutic agents for a number of cancers and infectious diseases.

Dendritic cells are central to Dendreon's immunotherapy, an approach that engages the ability of the immune system to target and eliminate neoplastic cells. As the most potent antigen-presenting cells in the immune systems, dendritic cells play a pivotal role in this process.

Tumor growth progresses because cancer cells escape recognition as threatening entities by the immune system, allowing them to be bypassed during immune surveillance.

To compensate for this, Dendreon has developed a process that educates dendritic cells outside the body, triggering their activation.

After retrieval from the patient's blood and their culture in the presence of appropriate cancer markers or antigens, the dendritic cells become selectively activated against these tumor antigens.

When they are subsequently reinfused back into the patient, the activated dendritic cells stimulate tumor-specific killer T cells which, in turn, eradicate tumor cells.

Precursor dendritic cells become activated by a co-cultivation with engineered tumor antigens for 40 hours in a serum-free environment, devoid of foreign proteins and growth factors.

Dendreon's cell separation and activation technology was licensed from Stanford University School of Medicine, of Palo Alto., Calif.

Currently, Dendreon is conducting a series of Phase I/II studies in prostate cancer, with a Phase I trial completed and a Phase II trial under way at the University of California, San Francisco. In the prostate cancer trial, the patient's dendritic cells are isolated from a unit of his blood. The dendritic cells are then activated using a proprietary prostate-specific antigen, and these activated cells are returned to the patient to stimulate a vigorous immune response specifically against prostate cancer.

Garcia said later this summer Dendreon anticipates initiating another Phase I/II clinical trial for prostate cancer at the Mayo Clinic, of Rochester, Minn.

"One thing we are very excited about is we know the trial is safe because there are no side effects associated with this therapy whatsoever," Garcia said. "When you consider the side effects of chemotherapy and radiation, there is obviously a definite benefit to this technology."

Dendreon also has received investigational new drug approvals to study its dendritic cell therapy in the treatment of multiple myeloma and AIDS. The company will begin a Phase I clinical trial of its technology for multiple myeloma some time this month.

In July 1997, Dendreon acquired an exclusive worldwide license from Immune Response Corp., of Carlsbad, Calif., to patents related to dendritic cell therapy for cancers and other diseases.

In May 1997, Dendreon signed a collaboration agreement with Osiris Therapeutics Inc., of Baltimore, which gives Osiris exclusive worldwide rights to use Dendreon's cell isolation and enrichment technology specifically for the recovery of mesenchymal stem cells. Osiris will use the technology to develop a therapy for diseased or damaged structural and connective tissues.

Last year, Dendreon signed on with BioTransplant Inc., of Boston, in an agreement focusing on developing methods for preventing human transplant rejection using pig organs.

Also the company, Garcia said, has its own patent for peripheral stem cell separation and is currently working on a collaboration to market that product. Dendreon's technology for stem cell separation uses negative selection as opposed to positive selection. *