There is a new player in the vascular endothelial growth factor field, in the form of Australian start-up Vegenics Ltd., a firm founded to develop and commercialize peptide and antibody antagonists in cancer indications.

The company was formed collaboratively by Circadian Technologies Ltd., with intellectual property and technology coming from the Ludwig Institute for Cancer Research in New York and Licentia Ltd., the commercial arm of the University of Helsinki. Circadian is providing the initial equity investment of A$4 million (US$3.1 million) and is setting up the business model, based on the concept of "creating a new corporate structure to facilitate the development of technology into product," and gaining a listing on the Australian Stock Exchange, said Leon Serry, managing director of Melbourne, Australia-based Circadian.

Circadian will own half of Vegenics, while the other half will be retained by LICR and Licentia.

Within the next 12 months, Serry said, Vegenics hopes to raise at least A$16 million in equity financing, "preferably by [initial public offering] on ASX," to fund further development work on potential peptide and antibody antagonists targeting the popular VEGF pathway.

The ability to inhibit the VEGF pathway is a mechanism "shown to have major therapeutic benefit by Genentech with Avastin, and is an area with extraordinary potential for improved cancer therapy," Serry said.

South San Francisco-based Genentech Inc. gained approval for Avastin (bevacizumab) in February 2004 in first-line combination therapy in metastatic colorectal cancer, and the drug recorded U.S. sales of $398 million for the first quarter. The drug is awaiting FDA approval as a second-line treatment.

Avastin acts on VEGF-A, while Vegenics' focus initially will be to develop drugs acting on VEGF-C and VEGF-D. Both of those "also act on the same receptors as Avastin," Serry said, while also acting "specifically on the VEGF receptor 3 to cause lymphoangiogenesis."

The implication is that blocking those targets "will elicit an improved outcome over blocking VEGF-A alone," he added, calling LICR's and Licentia's VEGF technology "one of the most exciting anti-angiogenesis targets in the world today."

Vegenics' programs will focus at first on breast and colorectal cancer, with lead products expected to enter the clinic within the next two to three years, Serry said.

The goal is to "partner selected indications and lead compounds at late preclinical/early clinical stage," he said, "but to retain all rights to our key cancer developments" through Phase III and commercialization, with Vegenics building its own sales force in Asia and seeking a distribution and marketing partner for North America and Europe.

Based in Melbourne, Vegenics initially will have a management team comprising Circadian personnel and consultants, though Serry said it expects to recruit people with drug development and biotech management experience over the next 12 months. Serry will head Vegenics' board, which also will include Robert Klupacs, of Circadian; Graeme Kaufman, of Circadian; Jonathan Skipper, of LICR; Andrew Simpson, of LICR; and Timo Tormala, of Licentia.

While LICR and the University of Helsinki will be conducting some of the ongoing research for Vegenics, most of the research and development work, along with the manufacturing, will be outsourced.

Over the past 15 or 20 years, Circadian has had a hand in forming a number of Australian firms, Serry said, such as Metabolic Pharmaceuticals Ltd. and Antisense Therapeutics Ltd. It also retains holdings in other ASX-listed firms, including Zenyth Therapeutics Ltd. and Avexa Ltd.

In addition, Circadian also has its own research and development program focusing on early stage programs in neuroscience and cancer.