By Frances Bishopp
Megabios Corp. added $14 million to its coffers through a private placement and launched its first product, a gene-based therapeutic for cystic fibrosis, into Phase I trials.
The financing was led by current investors, including Lombard Odier, of Zurich, Switzerland, and brings to $45 million the total raised by the Burlingame, Calif., company since its founding in 1992. The identities of several new European investors were not disclosed.
Patrick Enright, chief financial officer at Megabios, said the new funds were raised to push a select number of preclinical programs towards Phase I clinical trials in hopes of preparing data packages that would attract corporate partners.
Megabios, which provides gene delivery systems and gene-based therapeutics for genetic and acquired diseases, is partnering with Glaxo Wellcome plc, of London, on the cystic fibrosis product. They have developed an aerosol delivery vehicle that may have other pulmonary applications, Enright said.
Other collaborations for Megabios include a $50 million deal with Pfizer Inc., of New York, on treatment of solid tumors by inhibiting angiogenesis and a partnership with Eli Lilly & Co., of Indianapolis, on treatment of certain solid tumors using a single, undisclosed gene.
Megabios, which had $25 million in cash as of March 31, 1997, is a privately held company. In 1996, Megabios put off plans to go public due to a down market, but continues to scan market conditions for the future possibility of an initial public offering, Enright said.
"We have the luxury of having plenty of cash," Enright said. "There is no reason to rush."
Among other delivery systems being developed by Megabios are direct injection for genetic vaccines, direct injection for tumors, targeting circulating macrophages following intravenous injections, and direct injection into brain tissue.
Megabios' burn rate, Enright said, is in the range of $5 million per year. *