Phytera Inc. raised $8.4 million to help develop its technology inplant pharmaceuticals and with the financing the company isestablishing a subsidiary in Denmark.

The Worcester, Mass., company's private financing round brings theamount raised since 1992 to a little more than $20 million. Another$4 million to $6 million in this financing series is expected to comein over the next several months, said Malcolm Morville, Phytera'spresident and CEO.

Phytera can establish a cell culture from a single sample _ a seed,leaf or root _ rather than requiring a continuous supply of liveplants. Then the company's ExPAND technology allows for themanipulation of plants in culture to activate repressed parts of theplant genome and produce chemicals not normally in the native plant.

"The environment in which the plant grows dictates the chemistry,"Morville said. "Only a small part of this enormous genome is used atany one time. In that culture we can turn on the silent parts of thatgenome and get them to express chemicals.

"We have a number of lead series that have come out of the program,chemicals not present in native plants," Morville said. Phytera isseeking leads for antiviral, antifungal and resistant bacterial targets,and has novel approaches in hepatitis C, gram-positive resistantbacteria and other areas, he said.

Included in the $8.4 million financing is a commitment of up to $2.4million from the Danish Fund for Industrial Growth, of Copenhagen,a fund interested in attracting new technologies and jobs to Denmark,Morville said. Phytera is developing a 5,000-square-foot facility inCopenhagen, where some of the company's research will beperformed.

Morville said the financing _ together with additional fundsexpected from this series and anticipated revenues fromcollaborations _ should take Phytera well beyond 1997 and beyondan initial public offering. The company plans to develop some of itsown discoveries, particularly in the infectious disease area, andpartner other programs.

Other investors participating in the financing were the DanishDevelopment Finance Corp., of Copenhagen, a new investor, andexisting investors Commonwealth BioVentures Inc., of Portland,Maine; Dillon, Read Venture Capital, of New York; CR ManagementAssociates Inc. and BancBoston Ventures, both of Boston; andDeltec Asset Management, of New York.

The company was started with $1.75 million in seed money fromCommonwealth BioVentures; Dillon, Read; and BancBostonVentures.

In 1993 Phytera (which was originally formed as PlantPharmaceuticals Inc.) and Amersham International plc, ofBuckinghamshire, U.K., began a collaboration to identify diagnosticenzymes from the plant cell culture library to improve upon enzymesAmersham uses in kits detecting DNA and proteins. Morville saidPhytera delivered novel enzymes, which Amersham is evaluating. n

-- Jim Shrine

(c) 1997 American Health Consultants. All rights reserved.