Washington Editor

Xytis Inc. is planning to use $40 million in government funds to further evaluate Neboglamine (XY2401) as a treatment for cocaine addiction.

Specifically, the Irvine, Calif.-based company signed a Cooperative Research and Development Agreement (CRADA) with the National Institute on Drug Abuse (NIDA) to test whether the antipsychotic compound can help addicts abstain from the narcotic or prevent them from relapsing into addiction.

Xytis CEO Vincent Simmon told BioWorld Today that the money would be used to support upcoming clinical trials of two types: a Phase I safety study to test Neboglamine's interaction with cocaine, followed by Phase II evaluations of its ability to reduce the desire or craving for cocaine.

He called the funding "a pass-through," meaning that the money is tabbed solely for those future trials. Xytis, which will supply the drug for testing, will manage the studies in tandem with NIDA, and a third party is likely to conduct them under their watch. At the earliest, Simmon said, this testing will get under way late this year.

Neboglamine is a positive allosteric glycine site-specific modulator of the glutamate N-methyl-D-aspartic acid (NMDA) receptor complex, a mechanism designed to stop cocaine stimulation. A similar effect on norepinephrine is thought to produce the same result.

To date, animal models have demonstrated Neboglamine's ability to improve cognitive performance, as well as its anxiolytic and antidepressive activity. Recently completed Phase I studies testing single-dose escalations of the drug and its food interaction profile indicate that it's safe and well tolerated within the dose range expected for efficacy.

The CRADA arrangement remains subject to the completion of a number of studies, including Xytis-run safety and tolerability trials of a dose-escalating design, which are expected to be completed next quarter. The privately held company, which has raised $24.5 million in venture capital funding to date, also is using those tests to evaluate patients' 24-hour quantitative electroencephalogram (EEG) changes and their 24-hour Holter electrocardiogram (ECG), to examine their sleep architecture in polysomnography recordings and also to investigate a series of psychometric tests. Exploring the drug's pharmacodynamic effect on those physiological variables is expected to help in selecting the most responsive target patient population with schizophrenia, Neboglamine's primary indication, and possibly cognitive dysfunction and depression comorbidity, for future Phase II studies.

In addition, NIDA will conduct safety trials evaluating the interaction of cocaine and Neboglamine in animals and humans before the CRADA-supported studies begin. NIDA is a component of the National Institutes of Health in Bethesda, Md.

Going forward for Xytis, its focus will turn to beginning a Phase II trial of XY2405 for traumatic brain injury. The 400-patient study is expected to last about a year.

Specialty Firm Proprius Raises $11M

Proprius Pharmaceuticals Inc. brought in $11 million in a Series A financing that could grow to $17 million down the road.

The initial tranche will provide the San Diego company enough funding to progress current programs, including Indaflex, a topical nonsteroidal anti-inflammatory drug in clinical development for osteoarthritis of the knee. Specifically, the money is tabbed for completing a Phase II trial of Indaflex and advance it toward pivotal Phase III trials later this year.

The round was led by Atlas Venture, of Waltham, Mass., together with San Diego-based Forward Ventures and CDIB BioScience Venture Management in Taiwan. Returning investors included Fog City Fund, of San Francisco, and Windamere Venture Partners, of La Jolla, Calif.

In conjunction with the financing, Atlas' Jean-Francois Formela, Forward's Stuart Collinson and Fog City's Nancy Olson have joined Proprius' board.

IsoTis Eyeing $30M-$40M Raise

IsoTis Inc. plans to raise between $30 million and $40 million by offering newly issued Nasdaq-listed common shares to the public in an underwritten offering, further to its exchange offer for the outstanding shares of IsoTis SA.

IsoTis Inc., of Irvine, Calif., intends to offer the shares after securing its Nasdaq listing and consummating the exchange offer. If the conditions to the exchange offer are met, IsoTis Inc. expects to become Nasdaq-listed Jan. 26 and close the exchange offer next month.

The company plans to use net proceeds to support sales, marketing and general administrative activities, clinical research and product development activities and fund working capital and other general corporate purposes.

IsoTis Inc. expects to file a registration statement with the SEC to register the proposed public offering of the shares within the next 45 days.

Austrian Company Gets Seed Funding

The newly formed biopharmaceutical firm f-star raised €1.5 million (US$2 million) in additional seed financing, this time from Atlas Venture.

Founded last year to develop and exploit technology to generate improved antibodies and antibody fragments, Vienna, Austria-based f-star previously received more than €1.1 million in loans and grants from Austrian government agencies for research, technology and innovation. Its modular antibody technology allows the engineering of new binding sites into constant and variable domains of antibodies, so additional functionality can be built into antibody formats of any size. The company said this has the potential to improve antibody-based therapeutics' specificity, efficacy and pharmacokinetics.