BioWorld International Correspondent

Affibody Holding AB issued new shares worth SEK200 million (US$28.5 million), more than half of which is available to the company as new cash. The remainder takes the form of a debt-to-equity conversion.

The company has gained SEK107 million in new cash, from both new and existing investors, while the latter also have taken up additional equity by converting bridge loans worth SEK93 million. It has raised SEK543 million since its formation in 1998.

Stockholm, Sweden-based Affibody will use the new cash to begin clinical development of its lead product, an in vivo molecular diagnostic for imaging HER2-associated breast cancers.

That is based on its proprietary Affibody scaffold, which is derived from a 58 amino acid Immunoglobulin G-binding domain of Staphylococcal Protein A. The company can engineer diversity into the basic scaffold by randomizing 13 amino acid residues on the protein's surface.

"The half-life of the peptide is 30 minutes. That's why it's such a good imaging tool," Affibody CEO Ulf Boberg told BioWorld International. The company has developed a one-step peptide synthesis process for producing the molecule, which allows it to add a DOTA chelator to the final amino acid residue in a site-specific fashion. That, in turn, allows easy attachment of an indium-111 isotope to the molecule. As well as allowing clinicians to view the primary tumor, the diagnostic also will support tumor staging (classification) and detection of distant metastases.

Affibody's lead product has been engineered to bind to the HER2 receptor without interfering with HER2 signaling or with the action of Herceptin (trastuzumab), the anti-HER2 monoclonal antibody marketed by Genentech Inc., of San Francisco. It recognizes a different epitope from that to which the drug binds. It therefore will assist in the monitoring of Herceptin therapy as well and in picking up the 30 percent to 35 percent of patients who do not respond to therapy.

The breast cancer diagnostic previously was administered in a clinical study in Germany, the results of which were disclosed at a meeting in San Diego last year. "We already have human data. We know it works. The efficacy is there," Boberg said.

The company has entered dialogue with potential partners. "We will intensify that as we move along the clinical path," Boberg said.

At present, the U.S. represents the main market for the product, because of its large installed base of instrumentation. "There are 3,500 Spect (Single photon emission computed tomography) gamma cameras in use for oncology in the U.S.A.," he said. Europe's five largest countries have an aggregate total of around 700, he added.

Affibody also has plans to develop its protein binders as therapeutics, by replacing diagnostic radionuclides with cytotoxic radionuclides. "We can use the imaging results to pave the way for targetted therapy," Boberg said.

The company has developed proprietary technology for increasing the stability of the affibodies. Binding them to serum albumin extends their half-life to around 19 days and, the company said, is less complex than PEGylation and conjugation with other polymers.

The technology has potential application to HER2+ breast cancers that do not respond to Herceptin, Boberg said, as well as to those that lead to brain metastases.

In other financing news, Egalet A/S, of Copenhagen, Denmark, raised $19.3 million in a Series B round to expand its pipeline of specialty pharma products. The funding was led by V kstfonden Life Science Ventures, of Copenhagen, Denmark, while existing investors also participated.