Therexsys, which describes itself as Britain's first and onlycompany dedicated to gene therapy, has raised #6.4 million(U.S.$9.6 million) from a consortium of existing shareholdersand new investors in its first round of financing.

The company started operating in July 1992. Seed funds forthis stage came from Biotechnology Investments Ltd., ShroderVentures (which managed the fund) and 3i plc. Kate Bingham,biotechnology specialist at Shroder, described this first roundof financing -- less than $750,000 -- as "very unusual for us."These funds rarely invest such small amounts in start-upventures.

The placement was oversubscribed "and we could have raisedmuch more," said Bingham. Investments were scaled back tobroaden the investment group. New investors included AtlasVentures, JAFCO, New Enterprise Associates, Sofinova, SUMITEquity Ventures and Abingworth Bioventures, which managedthe placement with the new shareholders.

Therexsys (short for Therapeutic Expression Systems) works onsomatic-cell gene therapy, where genetic changes made inpatients are not passed on to succeeding generations. Thecompany is developing non-viral gene therapy. Therexsys saidits technology is based on the delivery of beneficial genes tospecific cell types in mixtures of cells.

The company was set up by Roger Craig, then head ofbiotechnology at ICI Pharmaceuticals plc; Frank Grosveld of theNational Institute for Medical Research; Mill Hill, an instituterun by the Medical Research Council (MRC); and Michael Dexterof the Paterson Institute for Cancer Research in Manchester.

Original backing for the company came from the MRC, theBritish government's funding arm for medical research, and theCancer Research Campaign (CRC), a research charity. Theycontributed patent rights and the use of their facilities inreturn for a share in the company's equity. According toBingham, the support of MRC and CRC made it possible forTherexsys to raise venture-capital seed money so the companycould conduct initial tests to confirm the viability of thetechnology.

The company's founders said they hope to have at least oneform of gene therapy in clinical trials within three years. Themoney raised in this round of funding will enable Therexsys toestablish its own laboratory facilities in the science park at theUniversity of Keel in Staffordshire. Until now, all research hasbeen conducted in laboratories operated by MRC and CRC.

-- Michael Kenward Special to BioWorld

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