Biotech Firm Raises $42.8 Million

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Biotech Firm Raises $42.8 Million

By CHRISTOPHER KEOUGH

Staff Reporter

Agensys Inc., a four-year-old Santa Monica biotech company, closed a $42.8 million private placement financing last month, a cash infusion it said would help boost its genetic research efforts into cancer treatment products.

Aya Jakobovits, chief scientific officer, said the company has discovered a portfolio of 50 proprietary targets (apparent cancer-causing proteins) for cancers of the prostate, colon, bladder, kidneys, ovaries and lungs. The next step, she said, is to take the targets and find ways to introduce antibodies that interfere with them to human patients.

The antibodies can be developed for therapeutic use by taking targets and injecting them into mice, which create antibodies to defend themselves. Researchers then harvest the antibodies and grow them in a lab for administration to human patients. That’s the pursuit Agensys intends.

“We have 50, but we are not done yet,” Jakobovits said, adding that the company will hire as many as 80 people across all areas of the business in the next two years.

John McCamant, editor of the Berkeley biotech investment report Medical Technology Stock Letter, cited the success of similar research at Genentech Inc. that produced breast cancer treatment Herceptin and Idec Pharmaceuticals’ Rituxan. McCamant said the fact that the new round amounts to two-thirds of the company’s $63 million valuation is a sign investors have faith in Agensys’ potential.

The funding eclipsed the company’s initial request of $30 million. The additional $12.8 million allows Agensys to move ahead more quickly than anticipated, Jakobovits said.

The money came from some new investors Bear Stearns Innoventures was the lead, with co-leads Orbimed Advisors and Alta Partners.

HBM Partners AG, Hambrecht & Quist Capital Management, Carnegie Kapitalforvaltning AB, BSI AG and ReqMed Co. Ltd. also were new to the company. Follow-on investments came from Lombard Odier & Cie and several individuals. The JP Morgan H & Q; Healthcare group was the placement agent and financial advisor for the round.

Agensys has a five-year agreement with Abgenix Inc., the Fremont biopharmaceutical company where Jakobovits used to work, to convert 25 of the targets into marketable products. The companies will put Agensys’ targets through Abgenix’s technology to develop antibodies. Agensys retains the rights to the antibodies and would have to pay Abgenix, depending on how Agensys exploits the antibodies.

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