By Don Long
Ontogeny, a specialist in developmental biology, boosted its own development with an infusion of $25 million from the sale of preferred stock.
The money will serve as a springboard for new growth, Ontogeny President and CEO Doros Platika told BioWorld Today, with plans to include doubling company size, forming new corporate partnerships and eventually taking the firm public.
Ontogeny, of Cambridge, Mass., now has between $30 million and $40 million in cash, Platika said, with an annual burn rate of approximately $4 million.
Earlier plans for an initial public offering (IPO) failed to come together, with the company's board of directors then approving the stock offering at a maximum of $25 million, Platika said.
The new funds will allow Ontogeny to pick its time for an IPO and put forth "a first class, real blue chip deal," Platika said, sometime in the next 18 to 24 months.
The strength of that deal may rest on the company's current position in the field of controlling molecules, called "hedgehog" proteins for their spiky appearance under the microscope.
These molecules play central roles in telling human cells which pathways to take, or in triggering human development. And they may be key in preventing and curing a variety of disabling diseases, such as Parkinson's disease, Huntington's disease and stroke.
Platika said Ontogeny presently holds 30 patents or patent applications related to hedgehog proteins, putting it in prime position to develop current applications and commercialize any future discoveries.
Ontogeny has three partnerships that Platika described as proceeding "very, very well."
It is collaborating with Biogen, of Cambridge, Mass., on use of hedgehog proteins for neuronal development. (See BioWorld Today, July 22, 1996, p.1.)
And Ontogeny signed an agreement with Boehringer Mannheim GmbH, of Mannheim, Germany, to track the activity of hedgehog proteins in the formation of bone and cartilage. (See BioWorld Today, Oct. 8, 1996, p.1.)
Most recently Ontogeny developed an alliance with Genetics Institute, of Cambridge, Mass., for access to that company's DiscoverEase protein development program. (See Bioworld Today, Jan. 1, 1997, p. 1.)
"They [Genetics Institute] give us their molecules, which we put through our proprietary process" — a system called OntoScreen, Platika said. That process looks for a "hit," meaning a protein that may lead to a drug candidate.
Overall, Ontogeny employs a three-phase drug discovery approach: first, identification of those molecules playing a role in human development; second, identification of where the development activity occurs; and the third and most important step, determination of how that molecular activity can be manipulated in a particular disease mode — in effect, finding the "switch" controlling a development process.
With its new funding, Ontogeny will grow from a current staff of 20 employees to about 50 over the next few months, Platika said.
Meanwhile, he sees Ontogeny's role in this area of biotechnology as central and perhaps precluding heavy competition.
"Someone else can always come out of the woodwork," Platika said. "But we think we have all the relevant intellectual property rights for these molecules. And we've been very inclusive in our licensing and patenting strategy."
Musket Research Associates, of Cambridge, Mass., assisted Ontogeny with the completion of the stock placement, and Montgomery Securities, of San Francisco, acted as financial advisors to the company. *