BioWorld International Correspondent

LONDON - Start-up PharmaKodex Ltd. raised £7.1 million (US$13.5 million) in its first-round funding for the clinical development of its seven-strong portfolio.

The company was spun out by Vectura Group plc and Unilever Ventures Ltd. in May to develop drugs based on oral and transdermal delivery technologies developed by the founders.

"We raised exactly what we wanted to raise and are pleased by all the metrics," Rod Richards, CEO, told BioWorld International. "The business model we've got means we can now accelerate development of our molecules to the point where they are valuable assets."

Chippenham, UK-based PharmaKodex specializes in re-purposing existing drugs for new indications, or to provide a new route of administration. Apart from the seven prescription products in the pipeline, the company also is developing six over-the-counter products. The most advanced of those should reach the market in 2008. The prescription products primarily are in pain and neurology.

The round was led jointly by Apposite Capital and SR One, both of London, with Unilever Ventures and Vectura following on. On Nov. 17, Vectura, also of Chippenham, announced that it is buying fellow pulmonary drug-delivery specialist Innovata plc in an all-share deal valuing Innovata, of Nottingham, UK, at £130.9 million. Chris Blackwell, CEO of Vectura, told BioWorld International the acquisition has no implications for PharmaKodex.

"We hold 20 percent or so and continue to see PharmaKodex as a fantastic opportunity. The difference for [PharmaKodex] will be having a stronger partner behind them."

The technologies assigned to PharmaKodex from Vectura include a solid syrup technology capable of rapid dissolution and a patchless transdermal delivery system, while Unilever transferred a particle formulation/solubilization nanotechnology and a novel encapsulation technology.

Richards said the funding will allow the company to take all seven products into clinical development and up to proof of principle before out-licensing. The business model is low risk, as there are safety data for all the original drugs and there are some clinical data for the delivery technologies.

"We will have a phased approach, with some products entering the clinic in 2007 and some in 2008," Richards said. "This funding round will take us to the point where we will be able to fund the company through partnerships, though I would never rule out raising more venture money for particular projects or opportunities."