In its largest financing to date, Intercept Pharmaceuticals Inc. closed a $41 million equity round to advance its lead compound targeting farnesoid X receptor (FXR) in liver disease and to accelerate other drug discovery efforts.

Milan, Italy-based Genextra SpA led the financing, with participation from Balyasny Asset Management, of New York, and JAFCO Life Science Investment, the U.S. operation of Tokyo-based JAFCO Co. Ltd. Prior to this round, Intercept had raised about $4.5 million since its September 2002 inception.

The company, which recently reported results from a Phase I trial of its lead product, INT-747, was "able to bring early stage work into the clinic on limited revenue," said Intercept President and CEO Mark Pruzanski, who founded the privately held company along with scientists Stefano Fiorucci and Roberto Pellicciari, both from the University of Perugia in Italy, and Steven Kliewer, from the University of Texas Southwestern.

Intercept's intellectual property comes from the University of Perugia, and Fiorucci and Pellicciari run the company's drug discovery efforts at their lab in Italy.

"Our focus from day one has been FXR," Pruzanski told BioWorld Today, "and we built the company around that IP, which included INT-747," a FXR agonist that has shown promise in preclinical work at reducing liver damage caused by fibrosis and cholestasis.

FXR is a ligand-regulated nuclear hormone receptor, and FXR targets, much like SERMs (selective estrogen receptor modules), "lend themselves to modulation," Pruzanski said, "which gives you the ability to generate gene-specific or gene-selective and tissue-specific effects."

Intercept is focusing on three series of compounds targeting FXR. The first, which includes INT-747, are agonists aimed at activating the receptor.

So far, preclinical data from INT-747 "have proven to be tremendous, providing a strong rationale for [the drug] in multiple, broad indications," Pruzanski said.

The drug was well tolerated in a Phase Ia single-dose study in healthy volunteers, and Intercept is preparing to begin a Phase Ib study next month to test repeat doses in healthy volunteers. After that, studies are expected to begin in patients with primary biliary cirrhosis, an autoimmune disease characterized by the inflammation of small bile ducts within the liver, as well as other types of liver disease.

Intercept also is conducting early work to identify a small molecule in a second series of molecules, which is designed to modulate FXR. For that program, "we'll be looking to select [candidates] more suited to metabolic indications," Pruzanski said.

The third series of FXR targets focuses on nitric oxide-donor FXR agonists.

Its recent financing is projected to sustain Intercept's operations for about two and a half years. Most of the company's work is done on a virtual basis, with about 15 people, most of them contract personnel, working on the discovery and development programs.

Riverbank Capital Securities Inc. and Rodman & Renshaw LLC, both of New York, acted as co-placement agents in the financing.

Intercept named Paolo Fundaro, of Genextra, and Kenneth Noonan, of L.E.K. Consulting LLP in London, to its board.

In other financings news:

• Accentia Biopharmaceuticals Inc., of Tampa, Fla., entered definitive purchase agreements in a private placement of common stock and warrants totaling $8.2 million. The placement was priced at $5 per share and resulted in the issuance of 1.6 million shares of stock and warrants to purchase an additional 823,500 shares at an exercise price of $6.59 each. Additionally, Accentia converted $3.2 million of existing indebtedness and related interest owned to Hopkins Capital Group II LLC in a non-cash transaction by issuing unregistered shares of common stock at a price of $8 per share. In separate news, Accentia said its majority-owned subsidiary, Biovest International Inc., was notified by the FDA that its proposal to use molecular remission data as part of a modified disease-free survival secondary endpoint in an ongoing Phase III trial of BiovaxID, is acceptable. The pivotal study is evaluating the use of BiovaxID, a personalized, targeted cancer immunotherapy for follicular non-Hodgkin's lymphoma. Shares of Accentia (NASDAQ:ABPI) closed at $5.67 Tuesday, down $1.

• Adventrx Pharmaceuticals Inc., of San Diego, said it plans to publicly offer about 15.5 million shares of its common stock in a firm commitment underwritten offering. The share price has not yet been announced. The company also plans to grant underwriters a 30-day option to purchase up to an additional 2.3 million shares to cover any overallotments. UBS Investment Bank is the sole book-running manager, with CIBC World Markets Corp. and RBC Capital Markets acting as co-lead managers and Fortis Securities acting as co-manager. Adventrx's stock (AMEX:ANX) lost 11 cents Tuesday to close at $4.53.

• Emisphere Technologies Inc., of Tarrytown, N.Y., completed the sale of 4 million shares of common stock at $8.26 per share to raise about $33 million. Proceeds will be used for general corporate purposes, including further development of lead clinical programs. ThinkEquity Partners LLC acted as lead placement agent, with WR Hambrecht & Co, and WBB Securities LLC acting as co-placement agents. Shares of Emisphere (NASDAQ:EMIS) closed at $9.59 Tuesday, down 13 cents.

• Enzon Pharmaceuticals Inc., of Bridgewater, N.J., said it started a private placement of up to $175 million aggregate principal amount of convertible senior notes due 2013, and the company expects to grant the initial purchasers an option to buy up to an additional $50 million in notes. Enzon intends to use the proceeds to acquire from time to time $395 million of outstanding 4.5 percent convertible subordinated notes due 2008 through tender offers, open market purchases, privately negotiated transactions or other transactions. In connection with the offering, Franklin Advisors Inc. agreed to purchase a minimum of $75 million principal amount of such notes, provided that the interest rate and initial conversion rate are within specified ranges. Franklin also agreed to sell $128 million principal amount of its 2008 convertible notes to Enzon.