Privately-held Sequana Therapeutics has raised $18 million in itssecond round of financing, including a lead investment of $7.5million from the Washington-based Carlyle Group.Kevin Kinsella, CEO of the La Jolla, Calif.-based company, toldBioWorld, "In a climate when public companies would raise halfthat, we did it in three weeks without a road show."The Carlyle Group, a private merchant bank, is run by a number offormer federal government officials. Frank Carlucci, formerPresident Ronald Reagan's secretary of defense, manages the CarlyleGroup and Richard Darman, former President George Bush'sdirector of the Office of Management and Budget, oversaw theinvestment in Sequana.Kinsella said Sequana, formed in 1993, has raised a total of $30million in developing a company that targets specific polygenicdiseases and uses gene sequencing and bioinformatics to discovergenes involved in those disorders. Among the diseases it's focusingon are Type II diabetes, obesity, osteoporosis, asthma and ulcerativecolitis.Unlike other biotechnology companies that have tried unsuccessfullyto set themselves up as a fully integrated drug companies, Sequana,Kinsella said, is establishing itself as a "biogenomics" companyselling information."We provide to corporate partners the specific genes and mutationsin diseases and help them develop diagnostics and therapeutics," hesaid. "And then if someone makes use of the information we alsoshare in the profits."Depending on the mood of the capital markets, Kinsella said,Sequana may be ready for an initial public offering in 1995.He expects the recent stream of bad biotechnology news - failed late-stage clinical trials, the collapse of companies and the shut-down ofD. Blech and Co.'s New York-based investment firm - to subside bythe end of the year."God only knows when you can go public," he said. "It depends onthe capital markets. But in 1995, if the capital markets overall aremore robust, the discriminating investors will come back."Sequana currently has two corporate partners, London-based GlaxoHoldings plc and Genentech Inc., of South San Francisco. For Glaxo,Sequana is focusing on genes associated with Type II diabetes. Theagreement with Genentech, which followed the Glaxo deal, givesGenentech a right of first negotiation for other gene discoveries."We have taken a different approach to gene discovery," Kinsellasaid. "From the beginning we saw that the critical step in positionalcloning was to have access to highly characterized patient material."The company has done that through alliances with groups such asKaiser Permanente, of Northern California, which has a data base offamilies with Type II diabetes, and Toronto-based Samuel LunefieldResearch Institute, which has blood samples from residents of asmall South Atlantic island who have an unusually high incidence ofasthma.For gene sequencing and genotyping, Kinsella said, the company isusing ABI machines (made by Applied Biosystems, a division ofPerkin-Elmer Corp. in Norwalk, Conn.). The next part of theequation was bioinformatics."We have invested one third of our resources in bioinformatics," headded.The importance of bioinformatics, Kinsella said, is in comparing thetargeted patient sequences to known gene sequences scattered aboutin various public databases."We are generating a gigabit of data a day, which has to becompared and contrasted with existing data bases," he explained."And there are about 100 publicly curated data bases."The value of bioinformatics, he said, was demonstrated recentlywhen the company's statistical geneticist, Lon Cardon, discovered agene linked to dyslexia. That was accomplished, Kinsella explained,by sifting through prior studies in the existing data bases. n
-- Charles Craig
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