BioVex Inc. raised $22 million in the first close of its Series E financing to complete ongoing Phase I/II and Phase II trials with the oncolytic virus OncoVEX GM-CSF, to move the program into Phase III trials and to advance a second program into the clinic.

Philip Astley-Sparke, president and CEO of Woburn, Mass.-based BioVex, said the second close of the Series E, which may generate up to $8 million in additional funding, is expected in about two months.

Triathlon Medical Ventures led the round, with participation by new investor New Science Ventures LLC as well as existing investors ABN AMRO Capital Life Sciences (now Forbion Capital Partners), Avalon Ventures, Credit Agricole Private Equity, GeneChem Management Inc., Innoven Partners and Scottish Equity Partners. Astley-Sparke said the second close likely will involve new investors.

The Series E provides sufficient funding to carry BioVex "through to 2009," Astley-Sparke said. He added that the use of proceeds will be "very focused" on getting OncoVEX GM-CSF to market as quickly as possible by completing the ongoing studies and launching a pivotal program.

OncoVEX GM-CSF is a proprietary form of herpes simplex virus (HSV) engineered to replicate only in tumor cells and to allow immune system recognition of OncoVEX-treated tumor cells. BioVex also added the gene encoding human granulocyte macrophage-colony stimulating factor, or GM-CSF, to heighten the immune response.

Data are expected by the end of the year from three ongoing trials of OncoVEX GM-CSF: a 50-patient Phase II monotherapy trial in melanoma, a 20-patient Phase I/II monotherapy trial in pancreatic cancer and a 20-patient Phase I/II head and neck cancer trial in combination with chemotherapy and radiation. If all goes well, BioVex hopes to obtain a special protocol assessment early next year for a Phase III malignant melanoma trial that would begin enrolling later in 2008.

Although preclinical and clinical data have indicated that OncoVEX GM-CSF can kill cells from eight types of cancer, Astley-Sparke said the company will not start trials in new indications but instead will focus on the pivotal work in melanoma. Similarly, preclinical programs exploring OncoVEX variations such as OncoVEX GALV/CD, designed to improve chemotherapy, and OncoVEX TNF-a, designed to improve radiation, also will take a backseat to the pivotal program.

Additional funding from the Series E round will be used to advance BioVex's second program, an engineered form of HSV designed to prevent and treat herpes. The lead candidate from this program, ImmunoVEX HSV2, will begin a Phase I trial by the end of the year. Once data from that trial are available, Astley-Sparke said BioVex will seek a partner prior to beginning Phase II trials. A preclinical combination vaccine for herpes and human papilloma virus would be part of the package for out-licensing.

As to partnering OncoVEX GM-CSF, Astley-Sparke said BioVex is "keeping the options open." While a partnership is certainly one of those options, it is "completely plausible for us to take it though the registration study" alone, he added.

The $22 million first close of the Series E round brings BioVex's running total of venture capital raised to date to about $85 million. The company closed a $5 million Series A in February 1999, an $18 million Series B in July 2001, a $30 million Series C in October 2003 and a $10 million Series D in July 2005. In mid-2006, BioVex filed to raise as much as $45 million in an initial public offering, but withdrew the filing last fall citing unfavorable market conditions. (See BioWorld Today, Oct. 7, 2003, and June 21, 2006.)

Astley-Sparke said BioVex is "certainly not looking to go public in 2007," but the company is keeping its "options open" for either an IPO or M&A exit in 2008.

In other financing news:

• Abeome Corp., of Athens, Ga., closed an unspecified amount of funding from Georgia Venture Partners and ATDC Seed Capital fund. The funding follows $1.75 million in seed funding raised in 2002 and 2003, as well as $200,000 in grants from the Georgia Research Alliance for Technology Partnership. Abeome uses its hybridoma technology to accelerate and improve the development of monoclonal antibodies. (See BioWorld Today, April 15, 2003.)

• Bioxel Pharma Inc., of Ste-Foy, Quebec, filed for a proposed Canadian offering of units consisting of one common share and one-half of a common share purchase warrant. Each full warrant will be exchangeable for an additional common share. The number of shares, pricing and warrant terms still are to be determined. Paradigm Capital Inc. will act as the lead agent in the offering, with Laurentian Bank Securities Inc. joining as part of the syndicate. Bioxel develops and markets taxane-based products and active pharmaceutical ingredients.

• Dyax Corp., of Cambridge, Mass., filed for a proposed public offering of 9.5 million shares of common stock. Shares of Dyax (NASDAQ:DYAX) fell 9.3 percent, or 39 cents, to close at $3.80 on Monday. At that price, the offering would generate approximately $36.1 million. Dyax plans to make an additional 1.4 million shares available to cover any overallotments. UBS Investment Bank is acting as the sole book-running manager for the offering, with Deutsche Bank Securities Inc. and J.P. Morgan Securities Inc. acting as co-managers.

• Neoprobe Corp., of Dublin, Ohio, said President and CEO David Bupp and members of his family purchased a $1 million convertible note and warrants in the company. The note is convertible into common stock at $0.31 per share, bears interest at 10 percent per annum during its one-year term and is repayable with no penalty. In addition, Neoprobe issued the purchasers 500,000 five-year warrants to purchase common stock exercisable at $0.31 per share. Neoprobe develops surgical and diagnostic products for cancer and cardiovascular disease.

• Plethora Solutions Holdings plc, of London, said it secured £4 million (US$8.1 million) in a convertible loan from ETV Capital SA. This funding will allow Plethora to complete the clinical development and planned filing for U.S. market approval of Invicorp, a potential treatment for erectile dysfunction. Plethora licensed exclusive North American rights to Invicorp from Senetek plc, of Napa, Calif., in February 2006. Plethora said product registration studies are expected to begin by the end of the year and take 15 months to complete. The convertible loan facility has a 39-month term with repayment scheduled to start in early 2008. Invicorp is an injectable combination of phentolamine mesilate and vasoactive intestinal polypeptide, being developed for patients for whom oral ED drugs are not a viable treatment option.