Neurocrine Biosciences Inc. announced Monday that it raised $3million in venture capital from three sources for research intohow the immune system and the central nervous systeminteract.
The La Jolla, Calif., company, formed in January to developproducts to treat diseases resulting from aging and stress-related disregulation of the nervous, immune and endocrinesystems, was funded by Avalon Medical Partners, D. Blech &Co., and Kleiner Perkins Caufield and Byers (KPCB).
Kevin Gorman, an associate at Avalon, said the deal representsa "hybrid" type of financing, where the three companies pooledfunds to build Neurocrine.
"This is the first time three of the premier venture capitalistsand investors, all whom do business very differently, havecome together to form a financing syndicate," Gorman said.
"We have pooled two different approaches -- traditionalventure capital and large private placement -- to form thecompany," he said.
While Avalon has had previous relationships with KleinerPerkins and Blech, KPCB has never worked with Blech, Gormansaid.
"This arrangement gives more breathing room than when I'mworking on my own," Blech said, "and comes with a veryknowledgeable group of people. It's (the technology is) a novelarea which deserves some exposure."
Neurocrine's seasoned management team includes Wylie W.Vale, chief scientist/neuroendocrinology and a professor at TheSalk Institute for Biological Sciences; Lawrence Steinman, chiefscientist/immunology and neurology professor at StanfordUniversity; Harry Hixson, former president and chief operatingofficer of Amgen Inc.; and David Blech of D. Blech & Co. in NewYork.
Neurocrine is aiming to raise in another major privateplacement scheduled for the second quarter of 1993 at least asmuch as the $48 million Blech and Avalon brought in for AriadPharmaceuticals Inc. of Cambridge, Mass., earlier this year.
Gorman said the sydicate's varied contacts will help it attract"high net-worth individuals and institutional buyers."
Sandoz Pharmaceuticals Corp., the U.S. subsidiary of the Swiss-based Sandoz Pharma Ltd., is the major limited partner in theNeurocrine venture.
According to Gorman, Neurocrine is not a technology-basedcompany. Rather, he told BioWorld, the company is based onthe theory that the central nervous system and the immunesystem communicate with each other.
"There has been anecdotal evidence that this relationship existsfor years." said Gorman. "But now we have identified thebiochemical mediators responsible for the relationship."
The company has found that extracellular signaling moleculesare responsible for the integration of the nervous, immune andendocrine system, and believes that faulty signaling can lead toconditions such as asthma, multiple sclerosis (MS), AIDSdementia, Alzheimer's disease, stroke, depression and anxiety.
Lawrence Bock, company president and chief executive officer,said Neurocrine is the first company to look at the impact thatstress has on these systems. "There is ever-growing evidencethat stress has a direct effect on the body's ability to fightdisease," he said.
Neurocrine's three drug discovery programs include thedevelopment of proprietary biomolecules that modulate themaster neuropeptides responsible for integrating the body'sstress response; a novel class of neurosteroids that potentiallystimulate the immune system; and patent-protected cytokinesand soluble cytokine receptors that promote neural survival.
Neurocrine has two potent immunostimulatory compoundsbased on neurosteroid modulation of the immune system inpreclinical studies. Steinman's lab at Stanford is working on anovel treatment for MS, and the company expects to file itsfirst investigational new drug (IND) application for this in thefourth quarter of 1993.
Concurrently, Vale's lab at the Salk Institute is working on anewly discovered neuropeptide corticotropin releasing factor(CRF) that may be linked to neurological disorders such asdepression, and chronic inflammatory and autoimmuneconditions, including rheumatoid arthritis and asthma.
Through licensing agreements with The Salk Institute, Stanfordand the Medical College of Virginia, Neurocrine has been issuedtwo U.S. patents covering CRF and one of the novel steroids it isdeveloping, and has nine U.S. patent applications outstanding.
-- Michelle Slade Associate Editor
(c) 1997 American Health Consultants. All rights reserved.