Biolex adds $60M, secures drug rights
Dow Jones VentureWire
10.07.08
Biolex adds $60M, secures drug rights
After pulling plans for an initial public offering earlier this year, biopharmaceutical company Biolex Therapeutics Inc. is moving forward with a new $60 million Series D financing round and the acquisition of the rest of the rights to its lead treatment.
New investor Clarus Ventures led the round, which included new investor OrbiMed Advisors. Previous investors participating in the round included Dow Chemical Co., Intersouth Partners, Investor Growth Capital, Johnson & Johnson Development Corp., JPMorgan Securities, Mitsui & Co., North Carolina Economic Development Fund, Polaris Ventures and Quaker BioVentures. The valuation of the round, which closed Oct. 3, was not disclosed.
This round accomplishes the fund-raising goals set out in the company's previous IPO plans, according to Intersouth Founding General Partner and Biolex board member Dennis Dougherty, while enabling the company to complete Phase II testing for its lead product.
"We're pleased to have sufficient capital, which was the reason to go public," Dougherty said. With the IPO, "the plan would have been for the company to have sufficient funding to complete its clinical trials and have a major change in its valuation."
For Biolex, the value inflection point targeted with this round would be the completion of Phase II studies for its lead candidate, Locteron. At the same time, Biolex also announced it has entered into an agreement with OctoPlus N.V. to acquire its 50 percent share of the commercial rights to Locteron for the treatment of hepatitis C.
With that agreement, Biolex will pay an upfront $11 million fee to OctoPlus from its Series D round, with an additional $138 million to be paid for additional development and sales milestones. Biolex will take on full responsibility for Locteron's development and commercialization. OctoPlus, in turn, will have royalty interest in Locteron and provide Biolex with manufacturing and process development services. Prior to this agreement, the two companies had shared the commercial rights to Locteron based on a collaboration formed in 2005.
Biolex, based in Pittsboro, N.C., will use the remaining funding to push Locteron through Phase II trials and develop its preclinical candidates. Locteron is Biolex's first product developed from its technology, which works by genetically altering the aquatic Lemna plant for the production of biologic treatments.
Locteron, which is currently in Phase II testing, is a controlled-release interferon alfa targeted at treating hepatitis C. While other treatments on the market for the disease also use interferon alpha, Biolex aims to have an advantage through its controlled-release delivery by reducing the side effects - such as flu-like symptoms - associated with pegylated interferon alpha products.
"They're in an established part of the market with a potential best-in-class product and a high barrier for anyone else to enter," said Clarus Ventures Managing Director Jeff Leiden, indicating that the acquisition of the Locteron rights further improves the company's position. "It's particularly valuable as they go out and think about either partnering or selling the product."
Biolex has developed two other preclinical candidates through its technology: BLX-155, a thrombolytic targeted at dissolving blood clots; and BLX-301, an anti-CD20 antibody aimed at treating non-Hodgkin's B-cell lymphoma and other diseases.
The new financing is "designed to take us through the completion of our Phase II programs and preparing the product Locteron to Phase III," Biolex Chief Executive Jan Turek said, adding that the company may turn to corporate deals for further development of that product. "We would anticipate prior to entering Phase III we would enter into such an arrangement."
Biolex uses its proprietary technology to develop therapeutic proteins that are difficult to make and to optimize monoclonal antibodies. The company is generating undisclosed revenue through partnerships surrounding that technology with companies including Merck Serono, Genmab A/S and Merial Ltd.
With the Series D round, Biolex has added Clarus' Leiden and OrbiMed Venture Partner Klaus Veitinger to its board.
Biolex has raised $105 million in equity to date, according to Chief Financial Officer Dale Sander, and most recently added a $10.5 million debt facility in July. Other existing shareholders that did not participate in this round include Academy Centennial Fund, Easton Capital Investment Group, Franklin Street Partners, Kitty Hawk Capital, Tall Oaks Capital, Trelys Venture Partners and Wakefield Group.
