Creative BioMolecules Inc. said Wednesday that it has raised$14 million through the sale of senior preferred stock, anincrease of $2.8 million from the originally planned offering.

The stock was sold to American and European institutionalinvestors, plus some of the Hopkinton, Mass., company'sprevious venture investors.

Privately held Creative plans to do an initial public offeringwithin six to 12 months, President and Chief Executive CharlesCohen told BioWorld.

Creative focuses on two areas: differentiation factors andgrowth factors.

Differentiation factors appear to work by stimulatinguncommitted cells to become whatever type of tissue has beendamaged. Osteogenic protein-1 (OP-1), the company's leaddifferentiation factor, is being evaluated for orthopedicreconstruction, and Creative hopes to begin Phase I trialsshortly, Cohen said.

Creative has a strong proprietary position, according to Cohen,with three issued patents.

Genetics Institute Inc.'s bone morphogenic protein-2 (BMP-2)is a member of the same family. "There is hot competitionbetween us and Genetics Institute," Cohen said. GI, which isdeveloping BMP-2 jointly with Yamanouchi Pharmaceutical Co.,is in advanced preclinicals to treat bone damage.

In growth factors, Creative's lead compound is platelet-derived growth factor to stimulate the repair of connectivetissue. The company plans to begin clinicals for severalindications next year.

Chiron Corp. and Amgen Inc. are among the companiesdeveloping PDGF, which will compete in a crowded woundhealing market. Chiron is conducting Phase II studies in skinulcers with its collaborator, Ethicon. Amgen recentlypresented data from a small pilot study to treat bedsores.

The money raised in this financing will enable Creative to addvalue to its compounds by moving them at least part waythrough clinical trials before seeking licensing agreements,said Cohen.

Prior to this financing, Creative had raised $18 million inthree venture rounds since 1982.

Creative is downplaying its work on biosynthetic antibodybinding sites. These molecules are being developing to deliveranti-cancer drugs directly to tumors and for imagingtechniques. In July, the company lost a patent interferenceaction against Genex Corp., which is being acquired by EnzonInc. Creative has filed an appeal with the Court of Appeals forthe Federal Circuit.

-- Karen Bernstein BioWorld Staff

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