BioWorld International Correspondent

MUNICH, Germany - Therascope AG secured EUR24.1 million in second-round financing to advance its approach to drug discovery with a technology the company calls target-amplified candidate evolution (TACE).

As part of the transaction, the Heidelberg-based company will change its name to Alantos Pharmaceuticals.

The lead investor for the round of funding was Oxford Bioscience Partners, of Boston. Earlybird Venture Capital, of Hamburg, acted as local co-lead for the round. Other new investors for this round include ABN AMRO, of Amsterdam, the Netherlands; Schroder Ventures Life Sciences, of London; and Ventech, of Paris. Returning investors include Auriga Ventures, of Paris, and Heidelberg Innovation, of Heidelberg.

Matthias Jaffe, vice president of finance at Alantos, acknowledged that the market for finding venture capital is difficult. What allowed the company to buck the general trend, he told BioWorld Today, was that "we have a unique technology that is addressing a point in the value chain that is closer to product generation than many other start-ups are offering."

"Maybe other innovative technologies in proteomics and genomics are sexier," he said, "but it takes a lot of effort to validate a target, and that's still not enough for a product." The technology that Alantos is developing "is something that the industry is interested in. With it, we can get to preclinical or even early clinical results faster."

TACE works with dynamic combinatorial chemistry, using predefined molecular building blocks to generate diverse libraries. The building blocks are put into a vessel and brought into equilibrium. At that point, all possible structural combinations of the building blocks exist together. Then the target is introduced and begins to bind with some of the combined building blocks. The compounds that bind best with the target drop out of the equilibrium, disturbing it. As the building blocks recombine to return to equilibrium, more of the compound that bound with the target is formed and binds with the target. This process amplifies the compounds that best bind with the target and, according to Alantos, minimizes the production of inactive compounds. Enrichment of the library with the best binders greatly simplifies identification of the active ligands from the large theoretical diversity of compounds. The ligands discovered in the process can then be further optimized.

Alantos distinguishes the TACE approach from both high-throughput screening and structure-based design. Unlike parallel library synthesis followed by high-throughput screening, Alantos' approach does not synthesize inactive compounds. Nor does it require the company to have extensive knowledge of the spatial structure of the target or its properties in biochemical pathways. The company believes those properties make TACE suitable for discovering drug leads for a wide range of new targets.

"We have proven that the basic principle described works," Jaffe said. "We are also working to improve the TACE technology: building up throughput, automating parts of the process and improving the analytics. We are making good progress on both fronts."

The company will use the new capital to improve the TACE technology and to ramp up its own pipeline of drug candidates. "We were fortunate to have investors who were very interested and brought in other venture capitalists to build a strong syndicate," Jaffe said. "Together, we put together a financing round that will support the company for at least 30 to 36 months."

Alantos was founded in 1999 to commercialize the TACE principles and technology. It has operations in Heidelberg and Cambridge, Mass.

The company already is working on targets it believes will work well with TACE. Those targets do not all come from the same disease area but were selected because "the biochemistry indicates that they would be well-suited for TACE," Jaffe said. He declined to specify the diseases the targets might be associated with.

"There's a lot we can get out of [our technology]," Jaffe said. "That's why we are working hard on advancing TACE as well as our pipeline."