The struggles of companies developing blood substitute products over recent years did not dissuade investors from getting behind Sangart Inc., which raised $50 million in a Series F round of financing.

The financing included warrants that, if exercised, would add $50 million more in funding to the San Diego-based company. Sangart in February started a Phase III trial in Europe of Hemospan, a human hemoglobin-based product whose oxygen delivery is designed to mimic that of red blood cells.

"The field we work in has become fairly cynical now, with a number of prominent failures in the last decade among companies developing blood substitutes," said Robert Winslow, chairman, president and CEO of Sangart. "It's a tough time to develop blood substitutes, especially for small companies like us.

"We believe we've solved the significant problems [associated with the field], and we're fortunate to have significant investors who share that belief," Winslow told BioWorld Today. "We believe the data support our conclusions."

The financing round was led by existing investor Leucadia National Corp., a New York-based holding company involved in a number of business areas. Specific details of the deal and other investors were not disclosed. Leucadia is Sangart's largest shareholder, Winslow said. Sangart has raised more than $120 million since its founding in 1998.

Hemospan consists of unmodified hemoglobin derived from human red cells, to which polyethylene glycol polymers are attached. It is designed to deliver oxygen effectively and efficiently to tissues at risk of oxygen deprivation. Sangart said Hemospan works because its oxygen delivery mimics that of red blood cells, presenting the right amount of oxygen to the blood vessel wall and preventing blood vessel constriction so blood flow can be maintained through capillary beds.

A Phase II trial in 90 patients in Sweden undergoing hip arthroplasty procedures demonstrated a statistically significant reduction in the number of hypotensive episodes in the Hemospan groups (46 percent in the 250 mL group, 42 percent in the 500 mL group) vs. 87 percent in controls (p<0.025). Data from the trial released in November also showed the incidence of intraoperative vasopressor use was less in the Hemospan groups, but not at a statistically significant level. It did show that mean heart rate was less in both treated groups vs. controls.

Winslow said Sangart has shown in Phase II the product's ability to prevent and treat hemodynamic instability, especially hypotension, or low blood pressure. He said the Phase III program to a large degree is an extension of that work. The goal is to determine if Hemospan can help patients avoid hypotension during elective surgery. Hypotension, Winslow said, is one of the strongest indicators for blood transfusions among patients losing blood.

The parallel Phase III trials are designed to include more than 800 patients in a number of European countries. One study will test Hemospan in preventing hypotension, the other to treat it. Winslow said treatment already is under way at about 40 sites in five countries, with enrollment expected to take about one year.

Phase II development of Hemospan in the U.S., which began in July 2005, has been bogged down by regulatory requirements and other issues, Winslow said.

He said Sangart does intend to file an investigational new drug application to begin testing of Hemospan in the U.S. for sickle cell anemia. And it is planning a Phase II trial in Europe to test the oxygen-transport agent for oxygenation in the skin of patients with peripheral arterial disease. Sangart also is developing technology to allow more user-friendly storage mechanisms.

Sangart is not leading the pack of companies addressing the market of blood substitution, a field that has dwindled somewhat over the years. Winslow said the front-runners in the area now are Northfield Laboratories Inc. and Biopure Corp.

Among the companies that have run into trouble are Alliance Pharmaceutical Corp., which had clinical and financing setbacks with development of the oxygen carrier Oxygent; and Hemosol Corp., of Toronto, which went bankrupt trying to develop Hemosol.

Shares of Northfield, of Evanston, Ill., lost more than half their value in December when it reported PolyHeme failed to meet its primary endpoints in a Phase III trauma study. PolyHeme, a human hemoglobin-based oxygen-carrying red blood cell substitute, was being evaluated in severely injured and bleeding patients when a blood transfusion is needed but blood is not immediately available. The company said it still intends to file a biologic license application, based on certain non-inferiority data.

Biopure, of Cambridge, Mass., also suffered a setback in December. The FDA's Blood Products Advisory Committee voted 11-8 to recommend against proceeding with the U.S. Navy's proposed Phase IIb/III trial, a 10,100-patient study of the company's bovine-based oxygen therapeutic, Hemopure, for pre-hospital treatment of hemorrhagic shock resulting from traumatic injury. That vote is not binding on the FDA. The previous month, however, monitors, following their first interim analysis, recommended continuation of a Phase II trial of Hemopure in trauma patients.

Another company in the field is Synthetic Blood International Inc., of Costa Mesa, Calif., which in December reported positive preliminary Phase IIa data from its Oxycyte product in eight patients with traumatic brain injury. Sanguine Corp., of Pasadena, Calif., is developing the oxygen-carrying synthetic substitute for human red blood cells, PHER-O2. It plans to use the product in conjunction with other transplantation transport materials to provide an oxygenated environment to aid in the longevity of whole organs. Also, HemoBioTech Inc., of Dallas, is sponsoring research at the Texas Tech University Health Science Center focused on development of the company's HemoTech product as a substitute for human red blood cells.

Winslow, a founder of Sangart in 1998, is optimistic his approach will overcome some of the difficulties seen in the field. He said it is distinguished by a focus not just on the blood product, but also on the transport system. He said the chemistry at Sangart is also advanced compared to some of the older products. A breakthrough, the company said, came from the understanding of the mechanisms of vasoconstriction caused by cell-free hemoglobin, and the development of simplified production methods.

Winslow said his company is open to a collaboration on Hemospan, and has had discussions with potential partners. But they have become "as cynical as everyone else. We need more data than were needed a decade ago. And we're OK with that."