With its lead cancer drug, CX-3543, finishing up Phase I development, privately held Cylene Pharmaceuticals Inc. closed a $44 million Series C round to fund upcoming Phase II trials of the small molecule in multiple indications, starting with chronic lymphocytic leukemia.

Funds also will be used to move into the clinic with follow-on cancer compounds, which, like CX-3543, were discovered in house using Cylene's discovery platform, the Ribosomal RNA Biogenesis Inhibitor Technology (RABIT). The potential of that technology, combined with promising early data from the company's lead compound, led to the "easiest financing I've ever done," said William Rice, Cylene's president and CEO.

The fact that CX-3543 is "behaving so well, that all our compounds are homegrown," he said, "and that we own all the rights to them," was a big selling point for investors.

Cylene opted to draw down the Series C money in two tranches, with the first representing 60 percent, or $27 million, of the overall round. The remaining $17 million would be available if needed, and is not dependent on future milestones.

That arrangement was "not imposed by investors," Rice told BioWorld Today, but rather by the company to ensure opportunities for potential partnerships or acquisition talks.

"We elected to do this because the first tranche is enough to get us through a couple of Phase II studies and get a solid data set," he said. But the company "might not have to take that additional money" if it secures a large collaboration or merger deal.

"The point is," Rice added, "all those avenues are in front of us now."

Money from the first tranche will carry the company more than two years, he said, and fund at least two Phase II studies, as well at least one additional product into Phase I testing. The full $44 million would sustain Cylene for about three years.

The round was led by HBM BioVentures (Cayman) Ltd. and Indianapolis-based Lilly Ventures, with participation from new and existing investors, including San Mateo, Calif.-based Sanderling Ventures; Basel, Switzerland-based Novartis BioVenture Fund; Cambridge, Mass.-based BioVentures Investors; Tucson, Ariz.-based Research Corp. Technologies; New York-based Mitsui & Co. Venture Partners; and Summit, N.J.-based Celgene Corp.

Cylene's last financing closed in May 2005, with a $26.3 million Series B round to transition its focus from early science to clinical development. (See BioWorld Today, May 26, 2005.)

"Our aim was to get to the end of Phase I with plenty of cash in the bank and full ownership of our molecules," Rice said. With the Series C round, "that's where we are right now," he added.

Co-founded in 1997 by clinical oncologist Dan Von Hoff, who now serves as the company's chief medical officer, Cylene was built on the RABIT technology. That platform aims to discover compounds that can inhibit rRNA biogenesis, which is elevated to provoke the rampant proliferation of cancer cells through a mutation in one of the cellular pathways: kinase, cell cycle, transcription and tumor suppressor pathways. The compounds are designed to selectively target a specific area of rRNA biogenesis, while showing no toxicity to normal cells.

Cylene's lead drug candidate, CX-3543, targets the protein/DNA interaction of nucleolin and quadruplex to inhibit rRNA biogenesis. That product has completed the maximum-tolerated-dose portion of Phase I testing, and "we are now accruing patients to look at biomarkers," Rice said.

The first Phase II study is set to start in the second quarter in CLL patients. Studies in solid tumor patients are expected to follow. Cylene hasn't yet identified the specific indications for those studies, but Rice said CX-3543 showed promising preclinical activity in models of prostate, pancreatic, lung and breast cancers.

Behind CX-3543, the company has "some really nice active compounds," Rice said, though he remained mum on specifics. "We hope to file an [investigational new drug application] late this year," he added.

Erich Platter of HBM, S. Edward Torres of Lilly and Reinhard Ambros of Novartis were elected to Cylene's board, joining previously appointed board members Walter Gilbert and Deborah Widener.