Xencor Inc. brought in $45 million in a Series E round to support upcoming Phase I trials of its two lead products: a selective TNF-alpha inhibitor for rheumatology and a monoclonal antibody targeting CD30 for Hodgkin's disease. News of the financing is expected to be announced today.

Both "homegrown" candidates were created using the core Protein Design Automation technology, a platform that generated a number of alliances for Xencor before the company began building a pipeline of its own, said Bassil Dahiyat, president and CEO.

"We've created a broad IP portfolio, and that lets us license elements of [the technology] while still maintaining the bulk of the possible value for ourselves," he said, a fact that has kept investors interested in the company since its founding in 1997.

To date, Xencor has raised $130 million.

"Investors really want to see companies that can build a unique platform with potentially profound advantages and then actually make drugs with it," Dahiyat told BioWorld Today.

The fact that the financing was driven by corporate investors highlights the "positioning that the big companies want to have around our technology," he added.

MedImmune Ventures Inc., of Gaithersburg, Md., led the financing, with participation from Bagsvaerd, Denmark-based Novo Nordisk AS; Cambridge, Mass.-based HealthCare Ventures; and Zen Investments. The round includes an initial $6 million bridge financing the company reported in July.

RBC Capital Markets served as placement agent.

Funding is expected to carry the Monrovia, Calif.-based company for two years, taking the first two products, XPro1595 and XmAb2513, through Phase I trials, as well as supporting ongoing work on Xencor's earlier-stage programs.

XPro1595, an engineered protein, is a dominant negative inhibitor of tumor necrosis factor-alpha (TNF-alpha). Blocking TNF is an approach that already has generated an $8 billion market with the blockbuster drugs Humira (Abbott Laboratories), Remicade (Centocor Inc.) and Enbrel (Amgen Inc.). But Dahiyat said the downside of those existing therapies is that they also end up suppressing the immune system.

Xencor's XPro1595 is "to our knowledge, the only agent that selectively blocks the inflammatory pathway of TNF but not the immune pathway," he said. That selectivity has been shown in animal models, and "now we're looking to bear that out in the clinic."

The company hopes to begin Phase I later this year, and that trial is being designed to "give us a look at biological activity" as well as safety and tolerability, Dahiyat said, adding that Xencor anticipates wrapping up Phase I in 2008.

Next year, the company expects to move into the clinic with its cancer drug, XmAb2513, an antibody that uses Xencor's Fc engineering technology. That technology involves the insertion of an Fc into the antibody to "heighten 100-fold the ability of that antibody to kill target cells by recruiting immune cells," Dahiyat said.

XmAB2513 is designed to target CD30 and initially will be tested in patients with Hodgkin's disease, but "we're looking forward to using this [program] as a showcase for our technology to greatly heighten antibody potency, in general," Dahiyat said.

Xencor's last major financing round came a year ago, when it pulled in $20 million in a Series D round. (See BioWorld Today, Oct. 20, 2005.)

In other financings news:

• AEterna Zentaris Inc., of Quebec City, closed its previously announced secondary offering of its 3.5 million subordinate voting shares of Atrium Biotechnologies Inc., also of Quebec, at a price of C$15.80 (US$13.88) per share for a total of C$54 million. AEterna Zentaris' remaining multiple voting shares have been converted into subordinate voting shares of Atrium, so that AEterna now owns 11.1 million subordinate voting shares, representing about 36.1 percent of the issued and outstanding Atrium shares. As it previously reported, AEterna intends to distribute all of its remaining shares of Atrium to its shareholders.