Preparing to enter the clinic with its first drug candidate this summer, Avidia Inc. closed its largest financing to date, raising $43.8 million in a Series C round.

The funding is expected to provide the company with financial flexibility as it moves its two lead products, both derived from its avimer drug discovery engine, through proof-of-concept development, said Peter Van Vlasselaer, CEO of the Mountain View, Calif.-based company.

Though the company originally hadn't planned to raise money until later this year - its Series B round brought in $28 million only a year ago - it couldn't resist taking advantage of investor interest, it said. (See BioWorld Today, May 6, 2005.)

"It was a very opportune time for us because the valuation was there," Van Vlasselaer said, adding that Avidia was the subject of "broad-ranging interest from both a venture and corporate financing perspective."

Palo Alto, Calif.-based Skyline Ventures led the Series C round, with participation from new investor Healthcare Ventures, of Cambridge, Mass., and existing investors Alloy Ventures, of Palo Alto, Calif.; Amgen Ventures, of San Diego; MedImmune Ventures, of Gaithersburg, Md.; Morgenthaler Ventures, of Menlo Park, Calif.; and TPG Ventures, of Menlo Park, Calif.

David Lowe, of Skyline Ventures, and Harold Werner, of Healthcare Ventures, joined Avidia's board.

To date, the company has raised "a little shy of $76 million," Van Vlasselaer said, adding that, depending on Avidia's business development efforts, funds from the Series C round could sustain operations through 2008 or well into 2009.

Proceeds will be used in several areas, the first of which is to "develop our existing programs, our IL-6 program and our IgE program, through proof of concept," Van Vlasselaer said.

Avidia's first candidate is designed to inhibit interleukin-6, a mediator of inflammation that also has shown potential in oncology and metabolic diseases. Avidia plans to initiate a clinical trial of a subcutaneous formulation in the next few months in inflammation.

By the end of the year, Avidia anticipates a pre-investigational new drug application meeting with the FDA for its second candidate, an inhibitor of IgE, in asthma. That product likely would be available as an inhalable dry powder.

Both drugs emerged from Avidia's platform technology to discover avimers, products aimed at treating multiple disease pathways at once. Avimers are small protein chains, structured like beads on a chain to bind to multiple targets.

"Most diseases are not run by one particular mechanism of action," Van Vlasselaer told BioWorld Today, "and therefore having molecules that can hit multiple underlying disease mechanisms in one product will be a great advantage," both in ease of administration and cost, over treatments that involve "cocktails of biotherapeutics."

Beyond funding the clinical work for the IL-6 and IgE programs, funding from the Series C will go toward expanding the portfolio of products based on the avimer technology, investigating new applications and delivery methods stemming from the technology, and positioning the company to pursue strategic collaborations.

Last fall, Avidia agreed to collaborate with Gaithersburg, Md.-based MedImmune Inc. to develop cancer therapies targeting cMET, a receptor tyrosine kinase found in high levels in certain cancer types.

In that deal, MedImmune agreed to handle all clinical development and commercialization, and Avidia, which is charged with providing research and development support, received an up-front fee and stands to earn potential milestones and royalties.

Avidia seeks more partnership opportunities like that, only larger, as "we have a little bit more leverage now to select a strategic partner," Van Vlasselaer said.

In other financings news:

• Adherex Technologies Inc., of Research Triangle Park, N.C., completed its previously announced private placement of units for gross proceeds of $6.5 million. The company issued about 7.8 million units, each consisting of one common share and 0.30 of a common share purchase warrant, priced at 84 cents each. Adherex expects to use net proceeds to fund its operations and research and development programs. Investors for the offering included Quintiles PharmaBio Development, the strategic partnering group of Quintiles Transnational Corp., also of Research Triangle Park. Following the private placement, Adherex will have about 50.3 million shares outstanding.

• AspenBio Pharma Inc., of Castle Rock, Colo., completed and terminated its offering under a private placement of unregistered securities totaling an aggregate of $2.2 million, with $1.4 million having closed previously April 13. A total of 1.6 million shares were sold at $1.40 per share. Proceeds are expected to fund working capital, product development and general corporate purposes. In separate news, AspenBio added Donald Traul as manager of scientific projects and Jose Perez as a quality control specialist in research and development.

• Medarex Inc., of Princeton, N.J., said underwriters exercised in full their option to purchase 1.5 million shares of common stock associated with the company's public offering that priced last month at $11.75 per share. That increases the total size of the offering to 11.5 million shares, resulting in net proceeds to Medarex of about $128 million. Proceeds will be used for its pipeline products, including MDX-010, which recently started a second Phase III trial in metastatic melanoma. Shares of Medarex (NASDAQ:MEDX) closed at $12.12 Tuesday, down 45 cents.

• Qiagen NV, of Venlo, the Netherlands, priced $270 million of senior convertible notes due 2026 to be sold in minimum denominations of $100,000 to institutional investors outside the U.S., an increase over the $220 million as previously announced. The company also has granted the initial purchasers of the notes an option to buy up to an additional $30 million aggregate principal amount. Funds are expected to provide additional financial resources and flexibility to the company, which plans to use proceeds to optimize the structure of its balance sheet, financing future acquisitions and for general corporate purposes.