Privately held Xytis Inc. brought in $24.5 million in its Series B financing to support upcoming trials with its lead drug candidates in schizophrenia and traumatic brain injury.

Formed just this month following a merger of London-based Xytis Pharmaceuticals Ltd. and Irvine, Calif.-based Remergent Inc., the company received funding from San Mateo-based-Sanderling Ventures, Boston-based Atlas Venture, and CDC Enterprises Innovation and Ventech, both of Paris. Xytis is based in Irvine, Calif., and has offices in the UK and Switzerland.

Company officials could not be reached for comment, though Xytis stated in a press release that proceeds from the financing will fund Phase II/III trials of XY 2405 in traumatic brain injury, and a Phase I/II program of its second product, XY 2401, in schizophrenia. Funds also will be used to develop other small-molecule candidates and allosteric modulators for treating other central nervous system disorders.

The company acquired worldwide rights to XY 2405 from Paris-based Fournier Pharma last year. The small molecule is described as a selective nonpeptide antagonist of the bradykinin B2 receptor. In Phase I studies, XY 2405 has been found safe in both healthy patients and in those with severe traumatic brain injury. The drug has been granted fast-track and orphan drug status.

After XY 2405, Xytis has XY 2401, an oral small-molecule allosteric enhancer of the N-methyl-D-aspartate glycine (NMDA) receptor glycine site aimed at treating symptoms associated with schizophrenia. It has been demonstrated that endogenous dysfunction or dysregulation of neurotransmission mediated at the NMDA glutamate receptor complex could contribute to some of the symptoms related to schizophrenia. XY 2401 is designed to modulate that receptor complex to reduce symptoms and cognitive impairments.

The company initiated a Phase I study of XY 2401 in healthy volunteers last quarter, and said preliminary analysis indicates that the drug is safe and well tolerated. A multiple-dose Phase I study is up next.

XY 2401 was licensed from Milan, Italy-based Rottapharm SpA, and Xytis holds exclusive right to develop and market the drug in the U.S., Canada, Japan, Australia and New Zealand.

Beyond its lead products, the company has a number of compounds in preclinical development, including allosteric modulators of nicotinic acetylcholine, GABA-A and other CNS targets, for treating disorders such as anxiety, insomnia, epilepsy and drug addiction.

In other financing news:

• Akesis Pharmaceuticals Inc., of San Diego, entered an agreement to raise up to $4 million in a private placement through the sale of up to 2 million shares of common stock and warrants to purchase up to 1 million shares. Share purchase price is $2 each, and warrants are exercisable for a period of three years at a price of $3 per share. Akesis said its plans to use the proceeds for general corporate purposes. The company develops treatments for diabetes and other related metabolic disorders.

• EraGen Bioscience Inc., of Madison, Wis., completed a $12 million Series A round, bringing the total capital raised by the company to date to about $21 million. The round was led by First Analysis Corp. and Prolog Ventures, with new investors, including Stonehenge Capital, and existing investor Novartis Venture Fund. Tracy Marshbanks, of First Analysis, and Greg Johnson, of Prolog Ventures, joined EraGen's board. EraGen develops automated molecular diagnostics products aimed at the personalized medicine and rapid response markets.

• Hawaii Biotech Inc., of Honolulu, raised $7.8 million in its Series C financing, with proceeds expected to go toward its anti-inflammatory small-molecule programs, including the preclinical and early clinical development of Cardax, a potential treatment for cardiovascular inflammatory disease. Funds also will be used for general corporate purposes. The round was led by Hawaii Biotech Board Chairman Nick Mitsakos, with participation by both Hawaii-based and mainland private investors. Frank Herringer, chairman and former CEO of Transamerica Corp., and Dick Foster, former founder and leader at McKinsey & Co., joined the company's board.

• OptiNose A/S, of Oslo, Norway, closed a financing round with the U.S. private equity fund, WFD Ventures LLC, with undisclosed proceeds expected to support its clinical development program for selected drug/device combination products under development in-house. OptiNose's breath-actuated bi-directional nasal delivery devices are aimed at both liquid and powder drug formulations.

• Protein Sciences Corp., of Meriden, Conn., closed a $6 million financing with three investors: Diamyd Medical AB, of Stockholm, Sweden; Pacific Rim Ventures Co. Ltd., of Japan; and a family fund. To date, the company has raised about $9 million. Funds from the latest round will be used to support the marketing of FluBlOk, a recombinant influenza vaccine that has accelerated approval status. In separate news, PSC signed a contract relating to Diamyd's lead product, a therapeutic diabetes vaccine, and will prepare to file an investigational new drug application for the product, as well as handle manufacturing for Phase III trials.