BOULDER, Colo. -- Synergen Inc. said Friday that it raised $52.5million in a private placement of limited partnership interests.Proceeds are to fund research, development and clinical trialsof Synergen's interleukin-1 receptor antagonist (IL-1ra) totreat rheumatoid arthritis, sepsis and septic shock, andinflammatory bowel disease (IBD).
The sale of interests in Synergen Clinical Partners (SCP) washandled through PaineWebber Development Corp. of New York.Investors also received warrants to purchase 2.6 million sharesof Synergen common stock.
The partnership is believed to be the industry's largest since1989, when Genentech Inc. of South San Francisco, Calif., raised$72.5 million to develop CD-4.
"The cash will give Synergen the competitive muscle power todevelop IL-1ra broadly and rapidly," said David Webber, abiotech analyst with Alex. Brown & Sons in New York. Thefunds will also enable Synergen to maintain ownership ofrights to IL-1ra until it is far along in development, givingSynergen strong bargaining rights with any potentialmarketing partner, Webber said.
Synergen's stock (NASDAQ:SYGN) closed Friday up $1 a share at$29.75.
IL-1ra is a receptor antagonist that binds to receptor sites oncell surfaces that would otherwise be occupied by interleukin-1(IL-1). IL-1 is a cytokine, a class of hormones responsible forthe growth and function of white blood cells. Elevated levels ofIL-1 are associated with a number of inflammatory and otherdiseases.
SCP was granted rights to a portion of product revenues fromthe sale of IL-1ra in the United States, Canada and Europe.Synergen retained manufacturing and marketing rights inthose geographic areas. It also kept exclusive rights to developand market IL-1ra outside North America and Europe, and hasan option to reacquire all rights to IL-1ra from the partnership.The option can be exercised two years after commercializationof IL-1ra in consideration for an up-front payment bySynergen to the partnership and ongoing payments based onproduct revenues, said Kenneth Collins, Synergen's vicepresident of finance.
Synergen last May reacquired full worldwide rights to IL-1rawhen its partner, F. Hoffmann-La Roche & Co., terminated ayear-old agreement to develop the product.
Synergen's primary competition in this area comes fromImmunex Corp. of Seattle, which has created a soluble IL-1receptor. Immunex's IL-1 program is funded throughReceptech Corp., which Immunex launched in late 1989 as aresearch spin-off with a $25 million initial public offering.Immunex aims to start clinical trials to treat arthritis late thisyear.
Synergen last September started Phase I/II clinical trials of IL-1ra in patients with rheumatoid arthritis. Phase I clinicals ofIL-1ra as a treatment for sepsis and septic shock started inDecember. Trials for chronic leukemia and IBD are scheduledfor later this year.
-- Karen Bernstein BioWorld Staff
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