New firm Artisan Pharma Inc. raised $39 million in a Series A round and in-licensed its first compound, a late-stage recombinant thrombomodulin in development for disseminated intravascular coagulation in sepsis patients.

The Framingham, Mass.-based company was founded specifically to develop and commercialize ART-123 worldwide, with the exception of Japan, China, Taiwan and Korea. The product was in-licensed from Tokyo-based Asahi Kasei Pharma Corp. (AKP), which has developed the product in Asian territories and recently submitted a new drug application in Japan.

Financial terms of the licensing agreement were not disclosed.

The formation of Artisan stemmed from a partnership between AKP and New York investment firm NGN Capital, with Apeiron Partners LLC, of Framingham, Mass., serving as adviser to AKP.

Leading up to the Series A round, AKP and NGN "worked to refine a clinical development plan and business plan," said Jeff Wager, president and CEO of Artisan. The plan will "center around ART-123 as sort of the flagship product," while seeking out other clinical-stage products in the critical care and hospital-based markets.

ART-123 is designed to target both coagulation and systemic inflammatory pathways, and "really exerts its mechanism of action on demand," specifically when it comes in contact with thrombin, Wager said. "It's particularly well suited for the treatment of DIC in sepsis."

Disseminated intravascular coagulation (DIC) affects about 30 percent of the 1.8 million sepsis patients in the U.S. and Europe every year, and is characterized by an excessive generation of thrombin that blocks blood flow to organs and leads to organ dysfunction and organ failure.

"ART-123 disrupts that process," Wager told BioWorld Today, adding that the drug immediately produces anti-coagulation and anti-inflammatory properties in the presence of thrombin.

AKP's development of the compound in Japan was a "strong driver of investor interest" in the financing round, Wager said.

AKP completed Phase III studies in DIC and has filed for regulatory approval.

Building on AKP's work, Artisan intends to begin with Phase IIb studies, starting the first quarter of 2007. Those studies are expected to take about two years, and pending positive results, the company could move into pivotal Phase III trials or seek approval for an accelerated regulatory process.

With Phase IIb data in hand, the company also would be poised to consider its strategic options.

"The attractive thing about this product is that it really lends itself to a number of options," Wager said. "Partnering the compound is a very viable option," as is seeking a public listing or a potential acquisition by a big pharma firm.

"Basically, we've raised enough money so that we'd be in a comfortable cash position even after the generation of Phase IIb data," he said, "so that we can fully explore the various options."

Artisan is "extremely well financed at the moment," agreed Georg Nebgen, managing general partner of NGN Capital, which teamed up with AKP last summer because "we found the Phase III data [on AKP's compound] so compelling."

From there, the company put together "an excellent team, and a phenomenal syndicate of Asian and American investors," Nebgen added.

NGN, of New York, led the round, with participation from Tokyo-based JAFCO, New York-based New Leaf Venture Partners, Singapore-based BioOne Capital and NovaQuest, the strategic partnering group of Quintiles Transnational Corp.

Joining Wager and Nebgen on Artisan's board are John Costantino, of NGN; Philippe Chambon, of New Leaf; Hironori Hozoji, of JAFCO; and a nominee from BioOne. The company expects to add two additional, independent members to the board.

In other financings news:

• Caden Biosciences Inc., of Madison, Wis., closed a $5.9 million Series A round led by Baird Venture Partners (BVP), with investments from Venture Investors, The State of Wisconsin Investment Board and IllinoisVentures LLC, and existing investor Vanderbilt University. Caden, previously known as Cue Biotech Inc., is developing assays for the high-throughput screening of allosteric modulators of G-protein coupled receptors. The company, which is relocating its headquarters to Madison, also named Pete Shagory, of BVP, and Paul Weiss, of Venture Investors, to its board.

• NeoStem Inc., of New York, completed its second private financing round in three months, raising $1.75 million. The company raised $2.1 million in July while it was still operating as Phase III Medical Inc. Shareholders approved the name change Aug. 30. Proceeds from the latest round will be used to develop NeoStem's intellectual property, which includes methodology for processing and long-term storage of peripheral blood stem cells, as well as to support operations, marketing and partnerships.

• Medior Pharmaceuticals, of Malvern, Pa., raised $7 million in its first financing round led by Polaris Venture Partners and Morgenthaler Ventures, with participation from HealthCare Ventures and Easton Capital. Proceeds are expected to support research and development activities, which include taking the company's lead compound in fibrotic disorders, through preclinical development and into the clinic. Medior was spun-out of Trellis Bioscience Inc., of South San Francisco.