BioWorld International Correspondent

PARIS - BioAlliance Pharma SA closed a Series C financing, raising €12 million from a group of European venture capital companies.

It brings to €18 million the total funding raised by the Paris-based company since its creation in 1997.

The financing was led by Auriga Partners, of Paris, which invested €2 million but already was the company's lead investor. Three new investors participated: Paris-based Siparex Ventures, which also invested €2 million; ING, of Amsterdam, the Netherlands (around €2 million); and FCJE, a public fund managed by FP Gestion, of Paris. Existing investors Capricorn Venture Partners, of Brussels, Belgium; ABN AMRO Capital France, of Paris; and SPEF Ventures, of Paris, also joined.

BioAlliance uses drug delivery systems based on adhesive and nanoparticle technology to develop therapeutics and predictive assays in the field of drug resistance focusing on cancer and infectious diseases, especially HIV, hepatitis B and hepatocellular carcinoma. It has on the market Phenoscript, a predictive phenotyping assay that measures resistance to HIV drugs. The product was launched in Europe and the U.S. two years ago and is marketed in both regions by BioAlliance's wholly owned subsidiary, VIRalliance.

However, BioAlliance's vice president of business development, Richard Keatinge, said Phenoscript's potential as a clinical tool is not being fully exploited and the product is not generating the revenues it could. BioAlliance is looking for a commercial partner for VIRalliance in the U.S. to market Phenoscript more aggressively and increase its market share.

BioAlliance has two other products in clinical development. The most advanced is Miconazole Lauriad, a once-a-day mucosal bio-adhesive tablet that provides sustained local treatment for buccal fungal infections (such as oropharyngeal candidiasis) in patients characterized by compromised immune systems. Two Phase III trials of Miconazole Lauriad are under way in Europe, one in oropharyngeal candidiasis in HIV patients and the other in head and neck cancer. Both trials are due to complete in October.

In addition, BioAlliance is preparing to file an investigational new drug application with the FDA before the end of the year for a Phase III trial of Miconazole Lauriad in the U.S. Keatinge said a single trial would be carried out in oropharyngeal candidiasis. He confirmed that the company planned to file for registration in Europe in 2005 and in the U.S. by 2007.

Keatinge added that BioAlliance would partner the product for commercialization and that it already was negotiating with medium-sized pharmaceutical and biotechnology companies in Europe, the U.S. and Asia (Japan). He said the company would prefer to have a single partner, but might end up with more than one.

The other product in clinical development is Doxorubicin Transdrug, which is based on BioAlliance's nanoparticle technology. A Phase I/II trial is under way at several sites in France in primary liver cancer and hepatocellular carcinoma but is still at the enrollment stage.

BioAlliance has a number of other new chemical entities for cancer and HIV in its preclinical pipeline, the most promising of which is an anti-HIV Integrase inhibitor. Keatinge said a number of companies have expressed interest in the product and said it "could be a very valuable asset." He said a Phase I trial would be initiated in 2005, either in Europe or the U.S. and probably in collaboration with a partner.

BioAlliance points out that its drug delivery platforms also give it opportunities to exploit off-patent products and to improve their bioavailability through mucosal or intracellular targeting.

The Transdrug polymer technology can be administered through several different channels - inter-arterial infusion (the form being tested in the Phase I/II trial), intravenous injection and orally - and is a platform that could be of "considerable interest" to some companies, Keatinge said.

While declining to put a figure on BioAlliance's cash burn rate, Keatinge said the latest financing "will carry us well into 2005," at which point Miconazole Lauriad could be partnered. He anticipated that the revenue flow from that product would enable the company to move into profit in 2007 or 2008. That could mean it does not need another funding round, whether private or public, although Keatinge said an initial public offering would be an option from 2005 on.