With its first yeast-based antibody undergoing a Phase I clinical trial, Alder Biopharmaceuticals Inc. raised $40 million in a Series C financing round.
Mark Litton, chief business officer of the Bothell, Wash.-based company, said raising the money was "much easier now that the risk has been reduced" by advancing a product into the clinic.
The funding is projected to last about two years and will allow Alder to complete multiple Phase II trials with its lead product, ALD518, which Litton called the first full-length, fully functional antibody to be produced on an industrial scale in yeast.
Antibodies and other complex protein-based therapeutics traditionally are produced in mammalian cells, although yeast-based platforms have been used to mass produce drugs such as insulin. GlycoFi Inc. - acquired by Merck & Co. Inc. for $400 million - figured out how to produce glycosylated proteins in yeast, while GlobeImmune Inc. genetically modifies yeast to express protein antigens, and FoldRx Pharmaceuticals Inc. uses yeast to study protein misfolding. (See BioWorld Today, May 10, 2006.)
Alder's patented Mab Xpress system, based on technology licensed from the Keck Graduate Institute, uses yeast to produce whole, fully functional antibodies. The benefits over mammalian production systems include increased speed and decreased cost. Commercial quantities of the antibodies can be produced inexpensively in days, resulting in a "favorable cost-of-goods structure" and potentially lowering the price of expensive biotechnology drugs, said Randall Schatzman, Alder's president and CEO. He added that the technology can be used not only in the production of established compounds, but in the discovery of novel antibodies.
So far, Alder has production partnerships with Schering-Plough Corp., Seattle Genetics Inc., Genmab A/S and two unnamed big pharma companies. The Schering deal also involves antibody discovery.
"There hasn't been a big pharma that we've visited that hasn't been interested in alternative manufacturing," Litton said. However, he noted that some potential partners are waiting to see if yeast-produced antibodies prove to be safe in clinical trials.
They don't have much longer to wait. ALD518 is undergoing a Phase I trial in healthy volunteers, and Alder expects data regarding safety and pharmacokinetics this spring. The company also plans to start a Phase I trial in cancer patients later this month, which also would wrap up in the spring.
After the Phase I trials, Alder plans to begin Phase II trials in rheumatoid arthritis and cancer, both of which could return data later in the summer. The company has yet to disclose what target ALD518 works against to exert its anti-inflammatory and anticancer effects, but Schatzman said there are "good clinical proof-of-concept data" to back it up.
Behind ALD518, Alder has a preclinical program focused on a yeast-produced anti-tumor necrosis factor (TNF) antibody and discovery programs in oncology and anemia. Litton said the company is "actively pursuing a partner" for the anti-TNF program.
Schatzman said "99 percent" of the Series C financing will be used to advance Alder's internal pipeline, adding that the work done for partners is funded through the partnerships. The Series C brings Alder's total of venture funding raised to date to $67.6 million, including a $16 million Series B in July 2006, an $11.1 million Series A in August 2005 and a $500,000 seed round in August 2004.
New investors Delphi Ventures and TPG Ventures led the Series C round.
Also participating were existing investors Sevin Rosen Funds, Ventures West, H.I.G. Ventures and WRF Capital.
Deepa Pakianathan, general partner at Delphi Ventures, and Heather Preston, managing director at TPG Ventures, joined Alder's board of directors.