BioWorld International Correspondent

LONDON - Inpharmatica plc raised £13.9 million (US$25 million) in a third-round funding that should bring it to profitability in the next three years and enable the company to accelerate its internal drug discovery programs to the point where they are ready for partnering.

The London-based bioinformatics company attracted Reed Elsevier Ventures (REV), the venture arm of the publishing company, as lead investor. REV put in £5 million.

Malcolm Weir, CEO, told BioWorld International: "Traditional biotech venture capitalists are perhaps not necessarily so keen on technology platform companies at present, whereas investors like REV, without those prejudices, come in with a fresh pair of eyes. As lead investor, REV has shown a good understanding of our business and recognizes the intrinsic merits and strengths of the company."

Apart from Dresdner Kleinwort Capital, all Inpharmatica's existing investors - Unibio, 3i plc, GIMV, Advent Venture Partners, Abingworth Management, Gilde Investment, Genentech Inc. and Temasek - also invested.

Weir said the money will provide working capital for its drug discovery platform, which is "now self-financing and heading toward being cash-generative. Overall, this funding will take us to breakeven as a company."

Before the round, the company had raised £34.6 million since it was spun out of University College London in 1998. It has a staff of 100.

It has 14 pharmaceutical and biotechnology companies signed up to use its PharmaCarta gene-to-drug bioinformatics platform. The system has three components: Biopendium for gene/protein identification, Chematica for target selection and lead identification, and Admensa for lead optimization.

The most extensive collaboration is with Serono SA, of Geneva.

"We expect to be working with them for some time," Weir said. "We have mined over 200 targets for them that are currently being pushed through Serono's internal development pipeline."

Using the PharmaCarta system internally, Inpharmatica has generated more than 60 patent applications on novel druggable protein targets. It plans to advance those to early preclinical stage before partnering.

The lead program consists of 16 nuclear receptors that are involved in a range of diseases including metabolic disorders, cancer and inflammation. To date, nuclear receptors have proved the most druggable of all major protein families, with existing marketed drugs against nuclear receptors generating sales of more than $14 billion annually.

Weir said REV's investment is a straightforward venture capital investment, and there are no plans at present to collaborate with Reed Elsevier Group. "However, there are potential synergies, between ourselves and Reed Elsevier's broader life sciences publishing business," Weir said.

Kevin Brown, a partner at REV, will join the Inpharmatica board. REV was established in 2000 with an initial fund of $100 million and an aim to invest in late-stage businesses with the potential to provide Reed Elsevier with new technologies, product services or customers. It is the first time the fund has invested in a bioinformatics company.